Homestead fraud is a growing concern among state and local officials, as well as residents, because it affects everyone.
Mills
“Homestead fraud is a growing trend that has the potential for significant penalties and is causing higher tax bills for everyone in Hamilton County,” said Hamilton County Auditor Robin Mills. “Individuals and married couples are limited to one homestead deduction, per the State Homestead law.”
Fraudulent deductions steal from public safety, schools and other services. In addition, it can lower the quality of life in Hamilton County. Ultimately, honest taxpayers are left with making up the difference that homestead fraud creates.
Homestead deductions are intended to give tax relief for a homeowner’s primary residence. Homestead fraud can occur a variety of ways. One of the most common occurrences is when an individual or married couple apply for and are approved for a homestead and subsequently, it is determined that they are not a permanent resident of Hamilton County. It is also illegal for a person or married couple to claim more than one “residency-based deduction” within the United States. Other ways fraud can occur is when the status of the property or of the individual(s) benefiting from the homestead exemption changes and the property owner(s) fails to inform the Auditor’s Real Property Department.
“Homestead deductions are not automatically removed when a taxpayer files a deduction on another property. It is the homeowner’s responsibility to provide a written, certified statement to the county auditor within 60 days of the date of change,” explained Sadie Eldridge, Lead Real Property Deductions Deputy. “Our county is always generating new ways to eliminate homestead fraud, including contracting with Tax Management Associates which will scour databases for evidence of fraud.”
Tax Management Associates will not charge anything upfront to research whether homestead deductions are legitimate. The firm will make its money by getting a percentage from any liens paid by property owners caught using homestead deductions they aren’t entitled to have.
“Tax Management Associates will be mailing letters to Hamilton County residents whose eligibility for the standard homestead deductions needs further clarification,” said Mills. “Should you receive something from Tax Management Associates please know it is not fraudulent and you will want to respond as requested.”
The homestead deduction gives a qualifying individual or couple a substantial property tax benefit by lowering their property tax obligation. When individuals who do not qualify receive the benefits it cost other taxpayers more. If you know or suspect Homestead Deduction fraud is taking place, please let us know by sending an email to ineligiblehomesteadtips@hamiltoncounty.in.gov.