Tax issues in Marion County (Indianapolis, Anderson: sales, apartment complexes, rental homes)

[ronnieglasses]

Hello all. My family and I have been in N. Indianapolis for 8 months. We moved from Columbus, Ohio because my wife just got a job at one of your major companies in town. We are in the market for a house and think we may have found something that REALLY fits our needs in terms of location, size and re-sell value. We are concerned, however, because of all the fuss we've heard on the news about high taxes. Has anything been resolved? We want to move out of our apartment ASAP but because we don't know what to expect in taxes...we haven't budged.

ron.

[Mike Taylor]

Ron -
Just to summarize, by 2009 all taxes will be no more than 1.5% of the assessed value and by 2010 and beyond all property taxes will be no more that 1% of the assessed value of your home.

The tax situation was a hot mess for a while, especially in Marion, but this should alleviate any fears that you might have.

[sweetana3]

I am a real pessimist. Guess the government is going to have to live on 1/2 of what they will get this year. My taxes will go from $4000(from 1700) under the new Marion County assessment to $3000 and then $2000 under this proposal. Just how long does anyone think that will last.

Never known a government to not spend every dollar and expect it to continue into the future. Its going to be an interesting time.

[Michelle Morris]

Sweetana, they are making up for it with the 1% sales tax increase (at least partially). Of course the sale tax increase started already but our property tax cap hasn't.

[Missy B.]

Originally Posted by ronnieglasses

Hello all. My family and I have been in N. Indianapolis for 8 months. We moved from Columbus, Ohio because my wife just got a job at one of your major companies in town. We are in the market for a house and think we may have found something that REALLY fits our needs in terms of location, size and re-sell value. We are concerned, however, because of all the fuss we've heard on the news about high taxes. Has anything been resolved? We want to move out of our apartment ASAP but because we don't know what to expect in taxes...we haven't budged.

ron.

Hi, I will try to explain it to you best as I can. I don't think anyone really understands the situation as I have come to the conclusion that the entire tax situation here in Indiana has been handled poorly and that is an understatement.

Back in December 2007 when we moved here, there was this huge uproar regarding an increase in property taxes here. At that time, no one was sure what the final result would be. The realtor that we used showed us an article from the newspaper that was a press release from the governor Mitch Daniels and it said the property tax situation would be resolved in early 2008. I cannot recall who exactly said it but it was anticipated that the property taxes would be capped at 1%. We purchased believing that the matter would be resolved soon after we closed. The state increased the sales tax to offset the revenue that would be lost from the loss of property taxes they would not receive because of inaccurate property tax values that had been inflated -- in summary, taxes went way up and people here could not pay those amounts.

We purchased in Hamilton County thinking our taxes would cap at 1% and that did not happen. Our house is new and Indiana gives a homestead and mortgage deduction that reduces your taxes but we have not received it yet because the tax bills have not been prepared yet. Confused yet??

Our taxes are based on a value of $160,200 and they are $2800 per year. Once the exemption kicks in, the taxes will be reduced to about $1100 per year if they cap at 1.5%. Unfortunately, we are stuck paying the $2800 until someone figures out what needs to be done and does it. This has gone on all of 2008 and into 2009 so I am not sure what will happen. In the meantime, we pay and pay.

Hope this helps a bit and I have not confused you beyond what you already were.

Missy

PS==welcome to Indiana!!

[gtrman]

The other "interesting" element about the tax situation is the bills are extremely late. When they do arrive, it's with little to no notice, and you're then given a very short turnaround for the bill. I'm expecting the "reconciliation" bill from last year, but it sure hasn't shown up yet.

Let's be sure to vote the assessor out of office at the polls. I'm sure the situation is complicated, but the captain of the ship has to take some blame.

[Ravekid]

Originally Posted by ronnieglasses

Hello all. My family and I have been in N. Indianapolis for 8 months. We moved from Columbus, Ohio because my wife just got a job at one of your major companies in town. We are in the market for a house and think we may have found something that REALLY fits our needs in terms of location, size and re-sell value. We are concerned, however, because of all the fuss we've heard on the news about high taxes. Has anything been resolved? We want to move out of our apartment ASAP but because we don't know what to expect in taxes...we haven't budged.

Right now, there are a few things going on with the property tax mess. First, understand that in most areas of Indiana, 45-65% of property taxes are for schools. I will discuss why this is important later on.

#1: We have written into _law_ residential, owner occupied caps on the _appraised_ value of the home. This year it is 1.5%, and I believe it will be 1% next year.

#2: We also have underway a push to amend the Indiana Constitution to put these caps in place permanently. The way Indiana does this, the law has to either pass this year, or next year. If it doesn't, the process has to start all over again (have to vote on the issue twice, in two different election cycles before the people get to vote on it).

As it stands right now, the law is still in effect. The house leader, a flaming socialist named Pat Bauer is blocking the efforts to put the caps into the constitution this year. He claims he wants more time for local units of government to see how the caps affect them. This is all smoke and mirrors. The Indiana State Teacher's Association (a/k/a: Teachers union, ISTA) pretty much controls about half the democrat party in this state. You can see the results of their control over the last decade or so. Massive amounts of wasteful spending at all levels. The schools that are halfway decent blow money on multi-million dollar sports complexes. The poor schools have so many "needs," they have run down facilities, massive administrations, but spend the most per kid than the rich or middle class schools do.

Basically, the ISTA, and really the entire Public School Industrial Complex, are trying to kill these caps. If the caps are written into the state constitution, it will be harder to get a judge to over-rule the caps on a per district basis. There was a huge Democrat party primary battle. It was a workers union candidate vs the public education candidate. It is my opinion that the goal of the public education candidate was to kill these caps, so those involved in the public school industrial complex could continue to make millions on the backs of taxpayers.

This is all very important because as I recall there was already a lawsuit, or talk of a lawsuit against the caps currently written into law. One complaint I heard was that commercial residential (ie: Apartment complexes, rental homes) had their caps at 2%. Their lobbyist group protested, saying that for some, rental living is how they want to live, and those rates should be at 1% just like owner occupied. I can't find anything right now on Google about any lawsuits, so either one was never filed or it was thrown out of court.

So right now, we need that push for an amendment, but certain high ranking Democrats are blocking that, they claim for only "this year." Don't believe them. Their goal is to keep their power in the house and hopefully screw up the entire push for property tax caps. It is all about serving their masters at the public schools.

So, right now things are "unknown." Basically the whole issue is that your poorer schools all over the state stuck it to the small, affluent neighborhoods in those areas. IPS stuck it to the home owners in Meridian-Kessler, Butler-Tarkington, etc.. The districts that serve poor students in Ft. Wayne, Anderson, etc. all stuck it to similar neighborhoods. A Meridian-Kessler home valued at $400K had a tax bill of $11K. Yea, you are paying $11K/year basically for a horrible school system, so most have to spend another $11K/year just to send their kid to private school.

Sometimes I wish the property taxes would have stayed as they were. If you thought white flight/money flight was bad back in the 70s/80s, the people with money who stayed in the old urban cores would have sold their homes the next day if the government didn't do something. So to prevent all of our urban centers here in Indiana from become Detroit, the government did something. Still, just because you get a 1% cap doesn't mean your taxes will not go up. Watch for some units of government to screw with the assessments. There will be lawsuits when some assessors try to up the value of homes in this down market, all so the various units of government get more money.

This thing is far from over. If I were you, I would stay in the apartment for another year. I still think this economy is not going to hold. It is hard to tell. My cousin said a home next to theirs just sold for $180K+. That is in Fishers, a decent size vinyl village home. It may be a fluke though, maybe those folks had money and they loved the house...hard to tell. I would have never thought that home could go for that much in this economy. So I would hold off if you can, bank a ton of money for a nice down payment.

[musiclovr89]

wow

[jcamber]

1.5% isn't bad. I wish we had that rate here in Texas where last year we were close to 2.7%. This also seems to be considered normal in major metro areas so I wouldn't go thinking 1.5 will last forever.

As far as not having enough notice when your bill arrives.... I think that if you pay your property tax and not your lender (through an escrow account) you ought to have at least that 1.5% saved and avoid letting the bill surprise you (I mean come on, you know the bill WILL come, right?) .

[restorationconsultant]

The caps are a good thing and one thing to remember is that if you are buying a home, due to the downturn in the market the price you pay "may be' lower than the assessed valuation. If it is, you are entitled to appeal the taxes when you purchase the house. But expect the wait to actually get the appeal done will take some time, there is a tremedous backlog.