One of my clients had stellar questions about Indiana property taxes tonight, and I had to share with you what I shared with him. Thanks, Dustin!
In 2009 – 2010, Indiana Governor Mitch Daniels (now President at Purdue University) began implentation of a 1% property tax cap for residential homeowners, 2% property tax cap for rental properties and farms, and a 3% property tax cap for business. This was an incredible savings for Hoosiers! There are exceptions to every rule, but those exceptions to the 1% cap can be if you have a pool, the special school assessments in your district, a shed in your backyard, and more.
As my client was asking, why do these taxes differ so much? Why do some properties have exemptions on them, and some don’t? How does that affect my payment? All very valid questions, and great things to think about in purchasing a home!!
Most homes that my client and I are going to peruse for what he is looking for will include a 1% tax cap with both a homestead exemption and a mortgage exemption. The homestead exemption is going to cut his property taxes nearly in half, and the mortgage exemption is helpful, as well. Sometimes a property won’t have exemptions, or may be missing one or the other exemption. One reason would be that if the current homeowner has vacated the property because they purchased another home in Indiana that will be their primary residence, and they’ve moved their homestead exemption (the heavy hitter exemption) to their new residence. If the home is one my client is interested in, makes an offer, and the transaction gets to closing, the title company will file the paperwork for the homestead exemption to be in his name.
Indiana is unique…in many ways, but especially the way in which we pay our property taxes. Indiana pays in arrears, so this year (2016), we’re paying for our 2015 property taxes. Due to that uniqueness, mortgage payments will be higher on a purchase of a house with no exemptions. Although mortgage payments for the first year will be higher on a home with no exemptions (or no homestead exemption), after that first year, the exemption will be placed, and the payment will adjust.
I think the more you know, the better you are – right?! Moreso, this is another great piece of evidence why it is imperative to have a seasoned professional help guide you through the homebuying process. Buying or selling, those pesky property taxes will need to be something discussed. Contact me at 317-480-7966 or firstname.lastname@example.org to get more information!
Have a great week!
– Your Favorite REALTOR 🙂
By Jill Curtis, talktotucker.com/jill.curtis