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New Indiana Farm Ground Tax Valuation Reduction

By Curt W. Pletcher, CPA, Partner, April 06, 2017

Could new farm ground reduction affect your property tax revenue - look for red flags.

If you are surrounded by luscious green farm ground dotted by herds of cattle or other livestock you need to be aware about changes to future farm ground assessed base value. The base value per acre for taxes payable in 2016 was $2,050 per acre and was reduced to $1,960 per acre for taxes payable in 2017. The Department of Local Government Finance base rate for taxes payable in 2018 has been certified at $1,850 per acre.  Proposed legislation, Senate Bill 308, is estimated to further reduce the base value to $1,500-$1,600 per acre by year 2020. That’s an overall reduction of 20 to 25 percent in farm ground net assessed value.

The change may assist agri-business but it shifts the tax burden to homeowners, rental property, retail, commerce and industrial property. The change may also increase tax rates, tax caps and other revenue reductions with the overall reduction in net assessed value.

The resulting reduction in NAV will affect schools, but other government units could also be affected through reduced net annual revenue collected. The change will not impact all school districts but you may want to take a look as you begin your financial planning. First, review your current property tax cap revenue loss position, total overlapping tax rates and breakdown of your NAV by property tax cap categories which are:

  • 1 percent for homeowner-homestead recipients;           
  • 2 percent farm and rental property; and
  • 3 percent commercial and industrial.

Farm and rental property red flag

If your farm ground NAV exceeds 15 percent of your total NAV and you are currently impacted by the tax caps you may want to have additional information to plan for the future changes and potential revenue impact.          

Recognizing the projected impact of the reduced farm ground property tax rates is complex. Our Umbaugh professionals are prepared to help you sort through the issues and create a financial strategy to better manage the impact. If you have any questions, please contact us at .(JavaScript must be enabled to view this email address).

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 vision@umbaugh.com.


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