Who administers property taxes?
Property taxes in Indiana are administered at the local level with oversight by the Indiana Department of Local Government Finance (DLGF). More than 99% of the revenue generated by property taxes remains in the community in which they are collected. Property taxes represent a property owner’s portion of the local government’s spending in a given year.
How are property tax bills determined?
A property’s assessed value is the basis for property taxes. Annually, local assessing officials assess the value of real property on March 1 based on market value. County officials add all of the assessed values of property in a county and subtract the applicable deductions to determine the county’s net assessed value.
How is the tax rate determined?
The DLGF sets the total amount of revenue government units in a county can spend in a year based on projected revenues for the county. This total allowed expenditure is divided by the net assessed value to determine the tax rate. Most simply, this can be explained as:
TAX RATE = Estimate of funds to be raised / net assessed value
The tax rate is multiplied by the assessed value after all deductions are subtracted from each property. The county auditor then applies the state Homestead Credit and Property Tax Replacement Credit to arrive at the amount the property owner will pay in taxes to the county.
How can taxes be estimated for new construction?
Property owners can estimate the property taxes for new construction by adding the cost of the land and improvements, and multiplying the sum by the tax rate.
What does “2007 pay 2008” mean?
Property taxes in Indiana are paid in arrears, meaning the taxes paid in the current year represent the taxes owed for the previous year. “2007 pay 2008” indicates taxes owed for 2007, but are actually paid in 2008. |