What do you have to say about Indiana's property taxes? (Indianapolis: rental, mortgage)

[patrickmich]

I am relocating to Indiana (Indianapolis) to afford a house. But I haven't
taken into account the less accessible factors such as the cost of property taxes.
I am under the impression that Indiana is probably middle of the pack
with regard to property taxes. Kentucky is probably much lower.
Any thoughts on this topic will be appreciated and sucked up like a sponge.

[domergurl]

Having endured Chicagoland property taxes for quite some time in the 1990's, moving to Indiana was a real eye opener in terms of much lower property taxes. Indiana has 2 exemptions that you can file with your county seat that will lower them even more. The one rub is that Indiana has been in reassessment heckl for a few years now, so for some folks, especially those who have lived in their older homes for decades, it hit them very hard. My in laws in Lake County had their property taxes jump from a few hundred to over 6K in one year. Fortunately, I was able to get their exemptions filed for them and it cut their taxes in half. But still, even at 3K, that was a hard pill to swallow for them. But for the most part, folks who have moved in from high tax states like Illinois, feel relief when we move to Indiana.

Here's some info:
Property Taxes
Property taxes in Indiana are administered at the local level with oversight by the Indiana Department of Local Government Finance.They are imposed on both real and personal property. Property, which is assessed at 100% of its true value, is subject to taxation by a variety of taxing units (schools, counties, townships, cities and towns, libraries, etc.) making the total tax rate the sum of the tax rates imposed by all of the taxing units in which the property is located. Homeowners are eligible for a credit against the property taxes that they pay on their homestead. The amount of credit to which the individual is entitled equals 10% of the individual's property tax liability, which is attributable to the homestead during the calendar year. A taxpayer entitled to receive a homestead credit is also entitled to a standard deduction from the assessed value of the homestead. The deduction is the lesser of one-half of the assessed value of the real property or $35,000. Homeowners 65 and older who earn $25,000 or less are eligible to receive a tax reduction on property with an assessed value of $144,000 or less and the individual received no other property tax deductions except for mortgage, standard, and fertilizer storage deductions. A surviving spouse is entitled to the deduction if they are at least 60 years old. The amount of the deduction is the lesser of one-half of the assessed value of the real property or $12,480. Call 317-232-3777 for details.

A circuit breaker program became law in 2006. It is aimed at helping residents by ensuring they don't pay more than 2% of their property value in taxes. The goal is to provide predictability in tax bills and equity among Hoosier taxpayers. It will become mandatory statewide for residential property in 2007. Homeowners will not see the potential impact until their 2008 tax bill. The circuit breaker expands to include all property types in 2009. Taxpayers will not see the impact of the expansion until their 2010 tax bill.

[patrickmich]

Thank you for the detailed response. It will take me a little while to study it and make sense of it. I am a first time home buyer, and as such do not have
experience with property taxes, and how they are calculated. Your answer
was thoughtful, thanks again.

[cinderella]

A couple of additional notes about property taxes. The standard homestead credit has been increased for 2007 to $45,000 and I don't think that dormergurl mentioned a $3,000 mortgage exemption.

[patrickmich]

Thanks Cinderella. I will come clean. I do understand what you or domergurl
wrote. It's a new language to me. Basically I am more interested in a comparison of sorts. Here in Colorado, based on the MLS listings I have browsed, the
average annual cost for property tax is about $1200. But our houses
out here are more expensive comparatively. A house in Indiana going
for 120K would go for about 200K here. How do our property taxes
compare against yours? Sorry if I am being simple about all of this.
At this point, I am just looking for general comparisons. I am literally
leaving Colorado in the morning and heading East. I will stop in many
towns along the way, and explore the housing market. Columbia, Missouri,
is one. Louisville, KY is another. Ultimately I am heading to Indianapolis,
the place I have researched the most. Common sense
tells me that I should be focusing on not only the cost of houses, but
also figuring in the cost of property taxes, too. Thanks!

[McFlubber]

Honestly, it all depends on what they assess your property for. This may not be what you bought the house at. In Texas, the taxes are based solely on the market value of your house. It's not that way in Indiana or Massachusetts. I've seen two houses on the market for the same amount one down the street a little bit from another. Both pretty much identical, yet one was $1,000 more in taxes than the other. It's best to ask your realtor to give you the taxes from last year along with the price of the house to help you in your search. I like MSWoods.com because they list the taxes at the bottom of each property. I like FCTucker.com for their Realbird mapping. Taxes in general are still cheaper here than any where else I've been.

Another thing to know if you have children, you will have to pay a rental fee for them to be in school. This pays for them to rent books and can be pretty expensive when you're not expecting it. I think I'm looking at over $500 for 4 of my kids to go to school in the fall.

[patrickmich]

thanks, that was helpful. I have been using MSWOODS, and find it to be a great site. I will check out the FCTUCKER mapping technology next.
Bottom line, you said Indiana is still cheaper than most places you've been.
That's good to know.

[domergurl]

Originally Posted by cinderella

A couple of additional notes about property taxes. The standard homestead credit has been increased for 2007 to $45,000 and I don't think that dormergurl mentioned a $3,000 mortgage exemption.

I mentioned that we get 2 exemptions ... I just didn't name them specifically.

[domergurl]

Originally Posted by McFlubber

Honestly, it all depends on what they assess your property for. This may not be what you bought the house at. In Texas, the taxes are based solely on the market value of your house. It's not that way in Indiana or Massachusetts. I've seen two houses on the market for the same amount one down the street a little bit from another. Both pretty much identical, yet one was $1,000 more in taxes than the other. It's best to ask your realtor to give you the taxes from last year along with the price of the house to help you in your search. I like MSWoods.com because they list the taxes at the bottom of each property. I like FCTucker.com for their Realbird mapping. Taxes in general are still cheaper here than any where else I've been.

Another thing to know if you have children, you will have to pay a rental fee for them to be in school. This pays for them to rent books and can be pretty expensive when you're not expecting it. I think I'm looking at over $500 for 4 of my kids to go to school in the fall.

Yea, the textbook rental fee ... what a stupid thing. As governor, I would have it stricken!

[Peter1948]

Originally Posted by patrickmich

Thanks Cinderella. I will come clean. I do understand what you or domergurl
wrote. It's a new language to me. Basically I am more interested in a comparison of sorts. Here in Colorado, based on the MLS listings I have browsed, the
average annual cost for property tax is about $1200. But our houses
out here are more expensive comparatively. A house in Indiana going
for 120K would go for about 200K here. How do our property taxes
compare against yours? Sorry if I am being simple about all of this.
At this point, I am just looking for general comparisons. I am literally
leaving Colorado in the morning and heading East. I will stop in many
towns along the way, and explore the housing market. Columbia, Missouri,
is one. Louisville, KY is another. Ultimately I am heading to Indianapolis,
the place I have researched the most. Common sense
tells me that I should be focusing on not only the cost of houses, but
also figuring in the cost of property taxes, too. Thanks!

Louisville is definitely an option for you, as it is similar in size to Indianapolis but probably has a bit less traffic. PM me or feel free to ask questions about Louisville. Louisville will offer a distinct vibe you cannot get in Indy and vice versa. Either way, this whole region is full of great people, good jobs, and growing steadily.