By MARK HALL
Guest Columnist
Don’t shoot the messengers. Short of state legislative intervention, property taxes are going up again. This is not the Assessor’s, Treasurer’s, or Auditor’s fault either. Following state regulations, they value our properties, compute our tax, send us the bill, and collect the payments.
Years ago, most of us thought about our property taxes when we received the bill or when we wrote the check. Today, taxpayers pay more attention. We also pay more attention to referendums, assessments, elections, and government spending. Recently, after receiving their new assessed value in the mail, a neighbor asked me to review their assessment and property tax bill. To them something was off. In their case, it was both surprising and accurate. Unfortunately, the review was also a peek at what’s coming soon.
As property owners in Hamilton County, we are looking squarely in the eye of a perfect storm: property tax increases, inflation at a 40-year high, increasing values of our properties, rising interest rates, worsening economic conditions and likely a recession. Let’s break this down a bit.
With limited exceptions, properties in the county have an Assessed Value (AV) established for that property by the Assessor’s office. The Assessor is required to follow state regulations to determine the values of property. The Assessed Value is the tax base for the county – the basis for property tax collections that fund the operation of local government. The AV is to reflect the market value of each property.
There is no limit on how much an assessed value can increase or decrease with new assessments. Hamilton County has $55.8 billion in assessed value from approximately 139,500 parcels. The Hamilton County total AV is up 15.2 percent over last year with some individual properties AV increasing by 20 percent or more. Increasing the Assessed Value results in a higher tax bill unless the tax rate is reduced to account for the increase in AV.
Property tax caps are in place, but they don’t apply to referendums that we voted to adopt. Residential property taxes are capped at 1 percent of the total Assessed Value of your property. The 1 percent cap is not on the tax rate, it’s a cap on the total tax amount at 1 percent of the value of your property. Again, the school referendum taxes are on top of this amount. In Noblesville township, as an example, the most recent district rate was 2.771 percent, with 0.5148 percent of that total attributed to the School Referendums. All Hamilton County district rates are published on the county website.
A property in Hamilton County valued at $200,000 a few years ago may now be valued at $300,000 or more. While that is an incredible return on investment, if you aren’t planning to sell soon, then plan for higher taxes. Renters are impacted too as higher values combine with higher tax caps to increase property owners’ expenses, often requiring an increase in rent to cover the increase costs. Seniors and fixed-income families may be challenged to adapt to the onslaught combination of recession, inflation, and rising property taxes. In our example the increase in AV is $100,000. If the homestead and mortgage deductions were already in place, the owner pays property taxes on an additional $65,000 in value. Each situation is unique and just like my neighbor, it is a good practice to review your property tax bill and your deductions every year. Just one deduction may mean significant savings for your family.
Deductions reduce the AV of your property. The lower your AV, the lower your tax bill. Deductions available include Homestead, Disability, Over Age 65, Disabled Veteran, Mortgage, Geothermal and a Circuit Breaker deduction designed to limit tax increases in certain specific circumstances. The staff at the Auditor’s office is friendly and will help you review your situation. Worth noting, anyone who makes changes to their deed/trust or marital status must re-file their deductions.
Assessing officials will re-assess approximately 25 percent of the parcels every year. When you receive a new assessment, you have a limited number of days to appeal the new valuation. Before appealing ask yourself this question. If I sold my property today, would it sell for that value? If the answer is no, an appeal may be a good option to lower your tax bill.
This column focused on residential property. There are different tax caps for commercial, rental, industrial and agricultural properties. For details on or to update deductions visit hamiltoncounty.in.gov or contact the Hamilton County Auditor’s Office.
Mark Hall is the Republican nominee for district three on the Hamilton County Council, in the November 8 general election. He may be contacted at mark@markfhall.com or (317) 832-1104.