Has the shock of increased property taxes settled yet?

Unfortunately, property values are expected to keep rising into the year 2025. As the real estate industry continues to have low inventory coupled with an increase in buyers, this drives demand up which drives property values up. Assessed value is for taxation purposes, used by your local and county governments. Market value is what a buyer is willing to pay for a property and a seller is willing to accept for their property. The bridge between these two values is the appraisal, during the due diligence period of acquiring the property. This appraisal value and final deed gets recorded with your local authorities.

In the past couple of years, thanks to COVID, we saw a BOOM in housing. The Association of Indiana Counties commissioned a study by Policy Analytics LLC and Dr. Larry DeBoer Emeritus Professor, Agricultural Economics, Purdue University, titled: Evaluating the Impacts of Increased Assessed Value in Indiana.  The average assessed home value in Indiana increased almost 16 percent during this boom. However, in Morgan County, the increase in property values was more than 20 percent. Higher home values mean higher tax bills. It would be beneficial to take this into consideration when budgeting for 2023, 2024 and 2025.

However, one thing to bear in mind is increased spending equals an increase in taxes. If your local government entities collected $20 million last year in property taxes and their budgets remain the same, your taxes would also remain pretty much the same – you’d just pay a lower rate. Any increase in spending means they need to collect more taxes. When coupled with an increase in assessed value, they can collect more while your tax rate could remain the same or even decreases overall. So, bear that in mind when your local elected officials boast that your rate remained the same or decreased. If the amount you paid went up, it’s because they spent / collected more in taxes, not just because your assessed value increased.

On a positive note with the rise in property taxes, these funds SHOULD be going toward items that taxpayers use, such as: schools; libraries; first responders; local infrastructure such as highways, roads and streets.  As a community, it is our job as taxpayers to make sure these increased funds are not contributing to items that do not directly improve our County, such as the salaries of local units of government. Our local government impacts our day-to-day more than our federal government. This is why we need to elect town council members that are just like you and me: Wanting to keep our hard-earned money in our own pockets, instead of the governments’.

I encourage you to check out the study

You can ask your local realtor to provide a comparative market analysis if you would like to try and appeal your hike in property taxes. You can go here for the required forms to appeal your property taxes.

Please Note: A Compromised House Bill 1499 has passed unanimously 98-0, while the Senate approved it 49-1, to help aid homeowners’ in their tax bills. Be on the lookout for these changes in 2024 and 2025. That bill would expand a supplemental deduction that’s currently set to a flat 25%.

Homeowners with properties worth less than $600,00 would see assessed value deductions of 35% for taxes this year, 40% for 2024, 37.5% for 2025 and and 35% for those due afterward. Those with properties worth more than $600,00 would get smaller deductions.

The bill would also raise income eligibility for senior citizen property tax deductions by linking the caps to the cost of living increases applied to Social Security benefits.

You can review information on that bill here.

Thank you for staying involved & informed in your community.

Tracy Bailey, The PINK Realtor & Libertarian of Morgan County