2012 is Statewide Reassessment Year
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2012 is a statewide general reassessment year in Indiana. What does that mean? The “2012” means that the reassessment takes effect with 2012 property taxes, which are paid in 2013. The actual process includes the county and township assessors (or their professional appraisers) physically inspecting each property to ensure real property assessed values are correctly adjusted to incorporate the new Real Property Assessment Guidelines as adopted by the Department of Local Government Finance (DLGF).
Indiana’s last statewide reassessment was for 2002 property taxes payable in 2003. In the past, a statewide reassessment sometimes created sticker shock for taxpayers if property values had increased dramatically since the last reassessment. That shouldn’t be the case this time since Indiana, beginning in 2006 tax year payable 2007, began revaluating all real property assessments annually to reflect market value based on comparable sales data (trending).
Another difference with this reassessment is that we have just experienced several years of property values decreasing, rather than the steady year-to-year increase we had grown to expect. Due to the general economic conditions and a sluggish real estate market, values have decreased through the trending process. The exception to the downward trend has been agricultural land, which has seen annual increases due to the separate method in which DLGF calculates assessed value for agricultural land.
The deadline for reassessed values to be certified was August 1, but only about 40 percent of Indiana counties have a certified value at this time.
We won’t know the full statewide picture for several months, but from what we are seeing so far, many real property assessed values for commercial and manufacturing properties are decreasing. The magnitude of these changes in assessed values also is varying from one part of the state to another. If your county has a large volume of agricultural property, you may have a more stable assessed value than an area with a large number of commercial and manufacturing properties.
Counties submit their updated assessed value to DLGF to be certified. The State then uses both the county’s certified net assessed value and the budgets of the units within the county to calculate the tax rate required to generate the budgeted amount.
As your assessed value is certified, look at your tax base. If the assessed values are lower or about the same as last year’s values, a higher tax rate may be required to generate the budgeted amount, which means more properties may hit the property tax caps, and you’ll receive less revenue due to the tax caps.
We have also continued to see property owners appeal their assessments in recent years; that will probably continue with the 2012 reassessment. As you plot your 2013 cash flow, allow for the possibility of these appeals, which, if successful, will impact your assessed value and revenue as well.
Going forward, statewide general reassessments are scheduled to occur every four years. The shorter time period should minimize dramatic changes between reassessments.
Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at email@example.com.