It’s no secret that Indiana’s property tax system is dysfunctional. Wildly varying valuations, delayed billing, changing deadlines and other factors contribute to make it a Byzantine situation that even politicians and those who work in the assessors offices can’t clearly explain. It’s no wonder that some home buyers who are new to the area end up caught between its wheels and pay a heavy financial price.
Take this case, a family moves from Florida, a state where tax exemptions transfer automatically, to Granger. He finds a nice house for his family. At closing he hears a twenty second lecture that it is important to file exemptions and given a sheet of paper to remind him of the fact. This paper is included in his closing packet, a stack of papers that can run a few inches deep. He gets his keys, gets absorbed unpacking, getting his kids registered for school, and settling in to a new life. He forgets he should drive to the County-City building and file his exemptions.
Months later, the tax bill comes. The assessed value of his house has changed since he bought it. He doesn’t have the homestead and mortgage exemptions he is eligible for, and the auditor’s office says it is unable to file them now. We’ll keep the math simple, but his tax bill ends up $2,000 higher than it was estimated, and that his mortgage company escrowed for. If he’s lucky, he can simply pay the difference and grumble about the system. More likely, he doesn’t have $2,000 handy, so his mortgage company changes his monthly payment to recoup the shortfall and to account for the new, higher tax amount next time. His payment has just increased a few hundred dollars per month for the next several years.
Nobody likes taxes, but most of us realize they are necessary for services including schools and police and street repair. Given this, why not make the system as comprehensible and regular as possible. It would be a simple change to ask home buyers if they are buying an exemption-eligible property at the time of closing. They could state which exemptions they qualify for, and sign an affidavit to that effect. The title company could report this information to the auditor and everyone could skip the “file in person” step. Nobody would forget to file because it would be automatic.
This would result in most buyers receiving the exemptions to which they are entitled. In addition, the taxing entities wouldn’t collect unintended taxes, and would be encouraged to regularize the tax burden so that the assessments are accurate, the rates reflect their budgets.
Do you have a tax related “horror story” or a proposal to improve the system? Share it in the comments.
The property tax system certainly needs improvement. One subdivision hit hard seems to be The Forest where the reassessment must have hit them hard…from the looks of things that is a “horror story” There a lot of homes in The Forest for sale and have sat on the market for many months. Does anyone have any insights?
I have a horror story alright.
I closed on my home at the beginning of April a few years ago. I was very careful to ask both the seller’s realtor and my realtor to find out exactly what my property taxes would be.
As required I filed for my Homestead Exemption in time. Many months later when my property tax bill arrived it was double of what I expected and I noticed the Homestead Exemption was not in place.
After many, many calls to the bank, county, realtors etc, I discovered that the seller had moved their homestead exemption to another home in February of the selling year, but sold the home to me in April, while the deadline for filing for the Homestead Exemption was March.
As a result, even though I knew what would happen a year before it occurred, it turned out that I was not eligible for the Homestead Exemption for my first year of ownership since I bought the home in April. To file the exemption I needed to be the owner in March.
This was the most idiotic law I came across. Just because the assessment is done once a year shouldn’t mean that I can’t file an exemption if I buy a home the next month.
In the end, I had to pay several thousand in property taxes for a home I’m now going to have to sell within a few years because I’ve had to move out of state for work.
ahhh – Just got my reassessment! What is going on with these taxes! My taxes will almost double, and I cant justify thhe increase – no water or sewer service to my home, and I thought they just did the reassessment a few years ago? Anyone know what is happening?
I had a similar situation happen to me when I moved to Mishawaka a little over two years ago. My tax bill went from $908 to $2488 because of this backwards system, making it difficult to file Mortgage and Home owners exemptions. My taxes should return to their normal level this year, but with the tax hikes in effect it is anyones guess what they will be this year
Do you all realize where your over-assessed tax dollars are being spent? St. Joe County does and so do I, but their information is not being reported, as required to Indianapolis, or to us either. Just broken promises, finger pointing and grand visions of our bright future here. The all mighty in power have so many “Pork” projects going forward, it only further cripples our city and our pockets too. What about the abandonment of our inner city, due lack of decent, affordable housing, brought on by the high taxes? What about our high crime rates, poor schools, lack of decent wage paying jobs, etc? That over-taxed money is for sure not going where it is needed. How about another airport? Once twice as big? I don’t think one is enough, even with it’s expansion. How about another Hall of Shame? Kernan at the Cove anyone? More tax abated commercial and residential developments? Don’t forget to vote this year. Clean house of all the entrenched pork spenders and get some new minds that may have better solutions than the generations of tax and spend thinking. Enough is enough!
My wife and I retired in 2007 , did a 1031 exchange out of our state to a property in indiana
(St. Joseph county). This property was to provide us retirement income. The ’06 tax was approx$14900.,then came our 1st tax year.’07…$14,290.,today we received ’08 tax an about had a heart attack…they want $$$ 4 1,5 3 0. 00…..this is hiway robbery,I thought Jesse James was dead but evidently he has taken up appraising for the out of touch tax asessors’ office. According to the news ..most realestate in most states has gone down 30 to 40% but evidently your tax appraiser isn’t in to “THE NEWS”.
The silent majority better wake up and vote these people out befor its to late.
These tax methods will cause serious losses up the road as people leave and/or people pass over investing in Indiana because of current tax methods.
A percentage cap is no good unless it is accompanied by a cap on percentage increase of the
asessed value.These turkeys just inflate your asessed value to make it come out to the money
they need…
Another disgrunted Retiree