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Sunday, April 21, 2024

Property tax deductions available to Homestead property owners

With spring taxes due May 10, it is crucial that residents know about the relief resources available to them.

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State Reps. Cherrish Pryor, Robin Shackleford, Gregory W. Porter, Vanessa Summers, John Bartlett and Renee Pack, Sens. Greg Taylor, Jean Breaux, and Andrea Hunley held a town hall to discuss property tax problems and solutions to constituents.

State Representative Cherrish Pryor and the Indianapolis delegation of the Indiana Black Legislative Caucus recently held a town hall at Progressive Baptist Church to discuss property taxes and deductions available to Homestead property owners.

Property tax rates in Indianapolis increased an average of 18% from last year, further burdening the 72% of low-income households in the city who spend half of their annual income on housing.

“I’ve been a champion in the fight against gentrification since 2016, and I’ve been calling on my colleagues in the Republican Party to address rising property taxes. Now, we’re passing legislation that won’t have an effect until next year while people are struggling to pay bills this year,” said Rep. Pryor.

RELATED: Mayor Hogsett signs property tax relief proposal, relief coming to 90% of single-family households

What about property tax caps?

  • 1% Property Tax Cap: Principal place of residence. Mainly one acre, one home and one garage (GROSS assessed value without deductions)
  • 2% Property Tax Cap: Other residential and agricultural land
  • 3% Property Tax Cap: Other non-residential real and personal property

What is the property tax distribution?

Property taxes are a primary source of local government funding. The statewide average revenue distribution for each property tax dollar as of 2018 is as follows:

  • County: $0.19
  • Township: $0.03
  • City/Town: $0.24
  • School: $0.42
  • Library: $0.04
  • Special Unit: $0.07

What do property taxes fund?

  • Schools: operations, capital improvements, referendum and debt paydown
  • Police and fire services
  • Local infrastructures like sidewalks, roads and streets
  • Public transportation
  • Health and hospital corporation
  • Courts
  • Libraries
  • Parks
  • Local government operations (City and County)
  • Township government
  • Tax increment finance districts

Why did my property taxes increase?

Assessed value has increased.

Residential properties saw an increase to 50% in 2023 vs 46% in 2022 in its share of property tax liability. All other property class liabilities either stayed the same or decreased.

Voters also agree to pay an additional amount to help fund needed services like schools, building a new hospital and mass transit in referendums.

How do I get help with my property taxes?

  • Appeal your assessed value

The Notice of Assessment (Form 11) is sent to taxpayers by the county assessor. Marion County uses the tax bill as its Form 11.

The deadline to appeal your assessment is June 15, 2023. You are appealing your assessed value (not the amount of your property taxes) on your tax bill.

Types of Appeals: Objective (based on data errors) and Subjective (based on the owner’s opinion). Use Form 130 to appeal. You must appeal the assessment with your local Assessor’s Office.

  • Property tax deductions

Property tax deductions reduce the net assessed value of your property liability and helps to reduce the amount taxpayers owe.

Most-used deductions: Homestead (Principal place of residence is the qualifier) Mortgage (This deduction ends with the 2023 payable 2024 taxes, a loan or home equity loan are qualifiers and must be filed with the County Recorder), veterans (Documentation from IDVA and AV qualifications), blind and disabled (proof of disability and income qualifications) and over 65 and over 65 Circuit Breaker (AV and income qualifications)

How do I get help with my property taxes?

Flex Pay is six equal monthly payments deducted from your checking/savings account or credit of your choosing, on your selected date each month.

Auto Pay is on tax due days. Property taxes are pulled automatically from your checking/saving account or credit card.

Scheduled Pay is when you choose any business on or before the due date to make a one-time payment of your property taxes. You must register to schedule a payment.

  • Indiana Homeowner Assistance Fund (IHAF)

Apart of the Indiana Foreclosure Prevention Network is a mortgage payment assistance program for eligible Indiana homeowners experiencing a hardship due to the COVID-19 pandemic. This assistance may potentially be applied toward delinquent and future property charge fees, including property taxes.

What are legislators doing to help?

Senate Bill 46 allows local governments to establish Neighborhood Enhancement Districts which can cap property tax payments between 2%-5% each year. This bill passed through the House and the Senate and is now heading to the Governor’s desk.

House Bill 499 ties the Over 65 income threshold to increases in social security, increase the AV limit to $240,000 for Over 65 Circuit Breaker, increases the homestead supplemental standard deduction and allows county councils to permit Homestead Property Tax Relief.

Senate Bill 325 redefines the definition of Homestead which allows for more improvements to be counted in the 1% or 2% property tax cap.

Important Property Tax dates

Remember a 5% late fee applies if a bill is paid 30 days after the due date. The fee increases to 10% after 30 days.

Deadline to file a Property Tax Appeal: June 15, 2023

Deadline to apply for deductions: December 31, 2023

If you have a mortgage on your home, it is likely part of your payment. This includes annual property taxes that are held in an escrow account. Your lender will advise you if they are increasing your monthly escrow amount because of increased taxes.

Homeowners asked the delegation specified questions about their properties and how to reduce property taxes.

Contact staff writer Jade Jackson at 317-607-5792 or by email JadeJ@IndyRecorder.com. Follow her on Twitter @IAMJADEJACKSON

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