Editor’s note: Effective 11/26/09, I am closing new requests for assistance with appeals. If you have registered for assistance I’ll contact you by the end of the week with a report.

After writing about the recently mailed tax bills for St. Joseph County, which also served as notices of re-assessment, I’ve heard from a number of people who believe their assessment is inaccurate or inflated.

Warning, what follows is lengthy. I tried to make it as simple as possible, but St. Joseph County property taxes don’t lend themselves to clarity. If you are planning to appeal your assessed value I think you’ll find it helpful. But if your eyes glaze over reading tax deadlines and details you might want to skip it and look at photos of South Bend.

If you want to appeal your assessed property value, you have 45 days from the mailing date of the tax bill to do so. In my case the postmark is November 10th, but because I escrow taxes in my mortgage payment the bank received my bill and I received a duplicate copy which was apparently mailed later. The Date of Notice on my bill is November 3rd and the fine print defines that as the date the property tax bill was mailed. So I’ll need to appeal before December 18th.

While you can appeal with a letter, I’d recommend using appeal form #130 to be sure you have all the required information in your appeal. That form suggests an appraisal trended to the valuation date as “the most effective method to rebut the presumption that an assessment is correct.” They are suggesting you appeal with an appraisal. But a report by a licensed appraiser will cost in the neighborhood of $300 for a typical South Bend home.

The form also lists a few other forms of evidence that are considered valid:

• A sale of the subject property adjusted to the valuation date (January 1st, 2007)
• Income and expense information, if the property is an investment
• Sales or assessments of comparable properties if the taxpayer can demonstrate the similarity between the appealed property and the comparable properties.

That’s not an exclusive list if you have some other evidence of your homes value, but those are the primary means to appeal your homes tax value. If you didn’t purchase your home in the last few years, the sales price isn’t very helpful. If you live in the house you won’t have income and expense information – think collected rents and maintenance costs. That leaves the typical taxpayer two options: pay for an appraisal or find the sales price of similar homes to justify your appeal. Unfortunately it’s difficult for people not in the real estate industry to find the actual sales prices of homes.

Boiled down, this leaves most appealing taxpayers two options – pay for an appraisal, or find a realtor to look for comparable sales for you. I can’t help everyone, but I do like to help people who visit this web-site. To that end, I’m offering free assistance finding comparable sales for tax appeals to the first twenty people who ask for it. Having sales data for other homes doesn’t ensure a successful appeal, especially as the value in question is for January 1st, 2007, but it is sure to stand a better chance than an emotional appeal to the county treasurer.

Just follow the link below and submit the form to get started.

Tax Appeals CMA Request

St. Joseph County recently mailed property tax bills for the “2008 pay 2009″ tax year. Payments are due December 11, 2009. I’ve heard reports of odd assessments and straightforward errors showing that the system needs further refinement. But the online search allows only 30 queries per IP address, which is not enough for any real study to see what is happening with assessed values and total charges.

I’ll dig deeper in the coming weeks, but wanted to post the link where you can view tax bills today. It shows assessment, exemptions, delinquencies and total charges. For a 2.95% surcharge you can also pay your bill by credit card through the site .

http://www.stjosephtax.net

My assessment went from $140,200 to $159,800 – which is twice the $80,000 I paid for my home six months ago. My tax bill rose from $1,607.47 to $2,612.40.  That puts my effective tax rate at 1.45%, just shy of the 1.5% cap for owner occupied homes this year. In the coming weeks, I’ll detail the property tax appeals process as I go through it.

• Housing Tax Credit
• First Time Homeowners Incentive 
• Stimulus Plan’s Home Buyer Credit
• $8,000 

Whatever you call it, the Federal Housing Tax Credit in the recent economic stimulus package is raising interest from first time home buyers. Housing is now so often in the news that much of it is reduced to background noise. But this is worth knowing about.

First time homebuyers, with some restrictions, can claim a tax credit of 10% of the price of any house they buy during calendar year 2009 and reside in for three years. The maximum amount of the credit is $8,000, which makes $80,000 the sweet spot for the tax credit. That’s the point at which you max out the credit, and don’t spend more without the same boost.

If you could qualify, this may catch your attention. But what does $80k buy in the South Bend, Mishawaka, Granger Region? There are 186 houses for sale in St. Joseph County that are priced from 70-90k, and have at least 1,000 square feet. I scanned them and here are the first few dozen that caught my eye, for whatever reason.

Admittedly, those are fairly random criteria. If you were looking for a house you’d probably want a list of homes with a certain number of bedrooms, a location near your work or school and maybe a garage or basement. Want your list?  All you have to do is ask by phone or e-mail. No strings, No spam.

574-217-4770 / nick@realst8.com

If you’re buying a property in South Bend before the end of the year (or anytime), it’s well worth paying attention to the property taxes. One house listed for sale today had a property tax bill of $25,364. Another is listed for $17,500 and had a recent property tax bill of $2,067 – an effective rate of 11%.

In Indiana, property taxes are billed in arrears, so each year’s bill is paying for the previous year’s services. The 2008 bills, for example, will pay for the services from 2007. For clarity, many people use both years when naming taxes – like “2007 pay 2008 taxes.”

The 2007 pay 2008 property taxes have not yet been billed by St. Joseph County as of 11-6-08. A phone call and quick question to the county treasurer’s office got me the response that they expected the 2007 pay 2008 tax bills to be sent late November or early December.

This means when you buy property in South Bend before the end of the year, you’ll want to make sure that 2006 pay 2007 taxes have been paid and that you collect enough money from the seller to cover the as of yet unbilled 2007 pay 2008 taxes. If you work with a Realtor, the title company they use to process your sale should take care of this – to the specification written in the contract you signed (your offer). But you should still ask your agent to explain it fully and be sure you understand how the tax liabilities are being sorted. If you are buying property without representation, or at an auction, do your homework because the tax liabilities can be considerable.

There are further tax considerations when buying new construction or foreclosed / bank-owned homes that involve the assessments and exemptions. If you find yourself considering the purchase of either new or foreclosed homes, double check how the taxes will be addressed at closing. The difference to your pocket can be severe.

If you want more detailed info on South Bend’s property taxes, the State of Indiana has a useful property tax web-site where you can read a “Citizen’s Guide to Property Taxes,” look up assessed values and recent property tax bills.

If you’re considering a purchase and need more specific advice, e-mail nick@realst8.com.

The state lawmakers in the house and senate approved a property tax reform bill Friday, 3/14/08. HB 1001 is the long discussed and significantly modified product of governor Mitch Daniels’ October 2007 property tax proposal (overview / details).

The passed bill retains the “one-two-three” percent caps on property that is residential and owner-occupied (1%), rental or agricultural (2%), and commercial (3%), but requires more than a few asterisks:

• It raises the state sales tax to 7%.
• The caps are phased in, so they won’t be fully effective until 2010.
• Two counties, St. Joseph and Lake, are partially exempt from the caps – taxes to cover payments on existing debt are not capped until 2020.
• Schools that can’t make ends meet under the caps can appeal the limits through voter referendums and governmental units that face 5+% shortfalls can appeal to a Distressed Unit Appeals Board.
• Counties have the option of raising local income taxes to offset declining revenue.

The full bill is lengthy and makes broad changes to the funding of schools, children’s residential psychiatric treatment, certain police and firefighter pensions, and other governmental expenses.

More about Indiana’s property tax reform under HB 1001:

• thorough digest and full text of the bill on the state of Indiana’s web-site
• article from the IndyStar on the passage of HB 1001, with quotes from many lawmakers
• article from the South Bend Tribune on property tax reform, with an estimate on South Bend Area tax amounts under HB 1001
• article from the Northwest Indiana Times on HB 1001, with a readable summary of the bill.

Foreclosure is all the rage these days, as banks are foreclosing on homes at a record rate.  (Just recently, one lender even got in trouble for instigating foreclosure proceedings on the wrong property.)  All of this foreclosure activity is obviously not a good thing, but if you are ever faced with foreclosure, here are the basics you should know:

Foreclosure Lawsuit

The foreclosure process begins when a lender files a lawsuit in court against the borrower because the borrower has defaulted on the loan (default is just a fancy term for “not paying”).  Indiana law does not require a lender to send a default notice to the borrower before filing the lawsuit, but most lenders do that as a practical matter (after all, it’s cheaper and easier to get a borrower to pay without going through the legal process—lawyers are expensive!).

The date the mortgage was executed controls the pre-foreclosure period between filing the lawsuit and the foreclosure sale date.  The pre-foreclosure period is a time when action can be taken to avoid the foreclosure, which they have been warned is coming. Most often this is three months, but for older mortgages it can be six or twelve months.  This of course depends on the terms of the mortgage.  (However, there is no waiting period for foreclosure on abandoned properties.)

Order of Foreclosure and Redemption Rights

After the pre-foreclosure period expires and the Court orders the foreclosure, a copy of the Court’s order is issued to the sheriff.  After receiving the order, the sheriff proceeds with the foreclosure sale.

At any time before the foreclosure sale, a borrower may “satisfy” the judgment by paying the debt, interest, and costs owed.  If this happens, the complaint must then be dismissed, and the lender remains in his/her home.  The foreclosure proceedings stop completely. This is called a borrower’s “redemption right” – everyone gets the chance to redeem his/her credit!

Mechanics of the Notice of Sale and Auction 

If the borrower does not exercise her right of redemption after the Court enters a final judgment of foreclosure, the sheriff appoints an auctioneer to conduct the foreclosure sale.  The notice of sale must be published once a week for three weeks in a local newspaper, and the first publication must occur 30 days before the sale to give ample notice.  The sheriff also must post the notice in a least three public places, as well as the county courthouse.  Finally, the sheriff must notify the borrower of the notice of sale. The owner may reside in the property, rent free, until the foreclosure sale, provided the owner is not committing “waste,” which essentially means tearing up the property.

Immediately after the foreclosure sale, the sheriff transfers the property ownership to the winning bidder.  If a lender postpones the sale, another sheriff’s sale request must be filed, and the notices must be re-served and republished.  (Some lenders will postpone sheriff’s sales to try and work out a resolution with the borrower.)  Once the sale is complete, however, a borrower no longer has redemption rights. The property is foreclosed upon, and the process is over.

Indiana Foreclosure Laws

The laws that govern Indiana foreclosures are found in the Indiana Code, Article 29 (Mortgages), Chapter 7 (Foreclosure, Redemption, Sale, Right to Retain Possession). You can view these statutes on the Web.

editor’s note:
This web-site is not a lawyer, but Stan Wruble is. Comments are open, but if you need specific legal advice,  please contact him directly.

South Bend hosts a public hearing on House Bill 1001 to reform Indiana property taxes 11 am Thursday January 10th at IUSB’s Student Activities Center.

The hearing is unfortunately timed on a weekday during working hours, but should feature local politicians thoughts on the matter as well as resident’s concerns.

You can read a lengthier write-up of the meeting on the South Bend Tribune.

Here is a Google Map to the Student Activites Center and a campus map of IUSB.

Indiana governor Mitch Daniels, speaking about the state’s property taxes stated “The status quo is not tolerable and we must act to fix it.” He then presented a plan for Indiana property tax reform this evening. It requires enactment by the state legislature, but is one plan that would make a striking difference in the bills homeowners receive and to the funding of certain local services. It’s highlights, briefly:

• 1% (of assessed value) cap on tax of owner occupied housing, added to state constitution
• 2% cap on tax of rental properties
• 3% cap on tax of business properties
• The elimination of our political assessment system – to be replaced with a single assessor appointed by each county council who will oversee future appraisals.
• The removal of remaining school operating costs and the costs of protecting abused and neglected children from local to state government through a one cent increase in the state’s sales tax (to seven percent) and the use of some of state budget surplus.
• county tax boards to review total of local spending
  
  plans and trim budgets.
• Required public referendums on any spending beyond the growth in local income and for new capital projects such as building new schools.

You can view the announcement at the governor’s Web-site:

St Joseph County property tax bills were recently mailed and have increased in many cases. Local media reports:

•  The county did a study which showed most property taxes increased 15 percent.
•  There have been problems with inaccurate assessments, especially for businesses in Clay Township.
• There are systemic problems that cause some tax bills to be calculated without exemptions, even when the property qualifies for them.
• There is a move, spearheaded by landlords, to revise the tax code or eliminate property taxes altogether.

Do you have anthing to correct from these reports, or to add to the property tax discussion? The comments are below.

You have less than a week until the extended deadline to file your St. Joseph County property tax exemptions for the 2007 pay 2008 tax year arrives – it is October 15th.

To file go to the County City Building at the address below. Find the recorder’s office to get your property tax ID number, owner of your loan, loan balance, and recording number. Take this information to the auditor’s office to file your exemptions. You will receive paper receipts. Save these – if the auditor’s office can’t locate a record of your exemptions, you will need these original receipts to prove you filed the exemptions.

The location to file in St Joseph County is:
227 West Jefferson, 2nd Floor. 574-235-9529