Indiana Property Taxes
Overview of Indiana Property Taxes
Every homeowner in Indiana is required to pay property taxes every year. Indiana property taxes are the primary source of funding for local government units including townships, cities, counties, and special districts. The taxes pay for government services like fire, road maintenance, police, and maintenance of buildings and constructions. Indiana property taxes are proportionately allocated to homeowners depending on the value of their property.
As is the case with many states, Indiana property taxes are administered by local governments. The state and its local governments collect $55 billion in total revenue every year. Of that, $6.9 billion or 12.4% of total revenue collected is from property taxes. Generally speaking, Indiana is a low tax state as indicated by the lower percentage of property taxes collected compared to the total revenue. On average, homeowners in Indiana pay 0.91% of their home value every year in property taxes or $9.08 for every $1,000 in home value. However, Indiana property tax rates vary from one county to the other.
Homeowners in Indiana are assessed annually by county assessors to determine their property's value. Properties are assessed at their "market value" or the price a random buyer would pay for the property. Property valuation is conducted through mass appraisal techniques. Factors that influence the valuation of your property include age, grade, and condition. Once your property's assessed value has been determined, the necessary deductions and exemptions are applied. The remaining amount is known as the "net assessed value" and is the figure upon which Indiana property tax rates are applied.
How are Indiana property tax rates determined? Each taxing authority submits an estimation of its budgetary requirements for the fiscal year to the Department of Local Government Finance. After reviewing the budgets to ensure they follow the laws and regulations, the Department then develops a tax rate for each taxing unit. The tax rates are based on the total revenue a taxing unit is allowed to collect and the "tax base", which is the cumulative net assessed values in their jurisdiction. If a taxing unit, for instance, a school district, is allowed to collect $1,500,000 against a tax base of $150,000,000, the tax rate will be ($1,500,000 /$150,000,000) 0.01%. The rate is then applied to your net assessed value to get the final Indiana property tax bill.
If you are planning to buy a home in Indiana and want to understand how much your property tax bill could potentially cost, check out our Indiana Property Tax Tool to see what your bill would be.
Indiana Property Tax Due Dates
As mentioned, Indiana property taxes are based on your property's value. You can appeal property taxes if you believe your property was wrongly assessed. However, the appeal only applies to the assessed value, not the tax rates. Additionally, you are still required to pay your Indiana property taxes pending the outcome of your appeal. Appeals can be filed with the county Property Tax Assessment Board of Appeals (PTABOA). Further appeal options include the Indiana Board of Tax Review and as a final resort, the Indiana Tax Court.
But when are property taxes due in Indiana? Indiana property taxes are due twice a year. You receive your tax bill with upcoming due dates in April. The first installment is due on May 10 while the second half is payable by November 10. However, you can pay Indiana property taxes in a single installment on the first due date. Property taxes are paid to the County Treasurer.
Failure to receive a tax statement does not excuse you from honoring your property tax obligation. Additionally, homeowners who pay taxes after Indiana property tax due dates receive a penalty. If you pay the taxes within 30 days of the due date, the penalty is calculated at a rate of 5% on the unpaid Indiana property taxes. However, this only applies to homeowners who don't owe back taxes on their properties. The penalty increases to 10% of the unpaid tax for homeowners who fail to pay the taxes and penalty within 30 days of the due date. Your property can be subjected to a tax sale if the taxes remain unpaid.
Indiana Property Tax Exemptions
Besides the option to appeal property taxes if wrongly assessed, the state of Indiana offers several exemptions to eligible homeowners. They include the senior and homestead exemptions. The exemptions can ease the Indiana property tax burden for qualifying homeowners. However, you are still required to comply with the Indiana property tax due dates even if you qualify for the exemptions.
Indiana Homestead Exemption
Indiana's homestead exemption is also referred to as the Homestead Deduction. The deduction reduces your property's gross assessed value by up to 60% or $45,000, whichever is less. The lesser your assessed value, the lesser the amount of Indiana property taxes. To qualify, you must be using the property as your principal residence and have owned the property by March 1 of the current property tax year. You must apply to receive the homestead deductions.
Indiana Senior Citizens Exemption
The senior exemption reduces the assessed value of a homeowner's property by $12,480 or half the assessed value, whichever is less. To qualify, you must be at least 65 years of age. Additionally, you must be living in the property as your primary residence, have an annual gross income of $25,000 or less, and have an assessed property value of $182,430 or less. Another exemption for the elderly includes the "Over 65 Circuit Breaker Credit" which limits your Indiana property tax increases to no more than 2%.
Other Indiana property tax exemptions include the Disabled Veteran Property Tax Deduction. This exemption offers a ranging amount of deductions on the assessed value of the veteran's property depending on their eligibility. To qualify, the veteran must have served in the military for at least 90 days and received an honorable discharge. More information about this exemption can be obtained from the Indiana Department of Veteran Affairs.
How to Appeal Your Property Taxes in Indiana
As a homeowner in Indiana, you can appeal property taxes if you have reasons to dispute the assessor's valuation of your property. The state requires the appeal to be reviewed locally before being appealed to the state. If you wish to appeal, you must first file a Taxpayer's Notice to Initiate Appeal with your local assessor. Depending on the reasons for appeal, the assessor can deny or approve your appeal. The assessor's decision can be appealed to the county Property Tax Assessment Board of Appeals (PTABOA). You can further appeal the PTABOA's decision to the Indiana Board of Tax Review and finally, the Indiana Tax Court.
The process of filing an assessment appeal varies across Indiana though it generally follows the same steps from county to county:
- Obtain your assessment
- Determine if you are overassessed
- Complete forms needed to appeal
- File property tax appeal
- Prepare for hearing
- Attend hearing
- Appeal the decision
How to Appeal Your Property Taxes in Marion County
To help you understand how to appeal property taxes in Indiana, the following is a breakdown of the process in Marion County, Indiana's largest county.
Obtain your assessment
If you own property in Marion County, you can obtain your assessment from your tax bill or by visiting the County Assessor's office. Due to the COVID-19 pandemic, the Marion County Assessor's office is closed to the public and can only be reached via phone or email.
Determine if you are over-assessed
A successful appeal includes evidence showing the assessor overvalued your property for purposes of taxation. Marion County has an easy-to-use online tool that will help you find the sale prices of similar units within the county. Alternatively, you can use TaxProper's search tool.
Complete forms needed to appeal
The forms you need to appeal your property taxes in Marion County can be obtained from the Indiana Department of Local Government Finance.
File property tax appeal
If you disagree with the assessor during the "Preliminary conference", which is a meeting between you and the assessor's office employee, the assessor sends a notice of the disagreement to the Property Tax Assessment Board of Appeals (PTABOA). You can file your appeal with the Indiana Board of Tax Review if you disagree with the PTABOA's decision.
Prepare for hearing
Preparation for a property tax appeal hearing includes presenting compelling evidence disputing the assessor's valuation of your property. Evidence can include pictures, appraisals, and sales of neighboring properties.
As a property owner in Marion County, you or your representative must attend an appeal hearing before the PTABOA. If you fail to show up at the hearing without sending a notice, you receive a penalty of $50. However, you can request the PTABOA to determine your appeal without a hearing in writing at least 20 days before the hearing date.
Appeal the decision
Decisions by the PTABOA can be appealed to the Indiana Board of Tax Review (IBTR). As a last resort, you can appeal decisions by the IBTR to the Indiana Tax Court.
Property Tax Information for Indiana Counties
The table below provides county-level information about how property taxes work in each Indiana county.
Want to learn more? Click the county links to learn more about a specific Indiana county.
|County||Average Home Value||Average Tax Bill||Bill per $1,000|
|St. Joseph County||$139,022||$1,394||$10.00|