Larry: The Indiana Property Tax is a local tax
100% of property tax revenues
support local government
counties, cities and towns,
school corporations, townships, library districts,
other special districts
To really understand the Indiana Property Tax
you need to know what's going on
in your own communities
That's where the county property tax reports come in
The legislative services agencies is the research to
build wrap and Indiana General Assembly
Each fall, the LSA publishes reports
about property taxes in each county
92 reports and a statewide summary
Larry: I'm Larry DeBoer
Tamara: And, I'm Tamara Ogle and this tutorial is on
reading the Indiana county property tax reports
You can find the property tax reports on
the General Assembly's website
at iga.in.gov
Click on the publications, and then property tax studies
and you'll find them, they go back to 2007
But, let's look at the latest for 2014
It works best if you download the document
to your own computer by clicking on the download icon
You'll see a map of Indiana and a list of the counties
Click on the county you want to see
either on the map or on the list
and up pops your county's property tax report
Larry: Let's take a look on what's in one of these reports
The first section is about statewide trends,
it's the same for each county report
This lets you compare what happened in your county
to what happened in the whole state
Next, comes a dashboard for your county
with a few major property tax indicators
this shows changes over all taxing units in the county
The paragraph above this chart
compares the increase of unassessed value
or the assessed value that is taxed
and the property tax levy for all local units
If the levy rose faster than assessed value
tax rates on average increased
If assessed value rose faster,
the average tax rate decreased
The paragraph says how many taxing districts
saw tax rates increases for decreases
from 2013 to 2014
Usually, more districts had decreases,
where the average tax rate went down
The first column on the dashboard table
shows the average change for a taxpayer's bill
This is for all properties, homesteads,
businesses, farmland in the county
The next column shows the total levy for all units
and the percent change from 2013 to 2014
The levy is the amount of property tax
a local government intends to collect
the total levy for a county would be the sum
of all unit levies any cities and towns,
townships, school districts, the county, and any other
taxing units
The third column shows the certified
and assessed value, again, for the
percent change from 2013 to 2014
This is the total assessed value for all property
in the county
after deductions and credits
The final column shows the tax county credits as
a percent of the levy
This chart really provides an overview
for the entire county
The charts following will give you a better idea
of what might have contributed to these overall changes
Tamara: Now onto the actual assessed value chart
This chart shows the change in gross and net
assessed value by property type
So what's the difference between gross and net
assessed value
Well, deductions of course!
You can see the largest difference
in the homestead category
Statewide net assessed value is less than
half of the gross
Homesteads receive the most deductions
with the standard deduction of 45,000
plus a supplemental deduction of 35%
of the remaining value
For Agriculture, on the other hand
the gross and net assessments are nearly the same
Ag doesn't get deductions
Neither does other residential property,
which is mostly rental housing,
business property may get abatements
So, the net is less than the gross
You can find out more about deductions in
our assessed value video
Another thing, we can glean from this chart
is the county makeup by property type
Are you in an agricultural county?
If so, Ag will be a big share
of the total gross assessed value
Suburban counties have a big share of
homestead property
Urban counties usually have
a large business property share
As well, as other residential because of
all the rental housing
The big university counties will have a lot of other
residential too because of all the student rentals
And those counties with lots of vacation homes
like Brown and Kosciusko
also will have a big share of other residential
Larry: The bar graph on the top right,
shows the total net tax collected by property type
this chart gives you a better idea of the
proportion of property taxes
paid by type of property owner
These proportions will be roughly related to
shares, properties, and assessed value
Note that commercial apartments and non-homestead
residential make up the other residential category
and other real property and personal property make up
the business real and personal property category
Likewise, the change in the total net tax by
property type usually will be related to the change of
net assessed value
Tax bills or assessed value times tax rates
so raising assessments usually produce raising tax bills
There are several reasons why this might not be true
but, if you remember from the property tax basics
The levy is set by the local government and
divided by the assessed value
to get the tax rate,
so if assessed value in a given tax district increases
more than the levy, the tax rate will drop
A big increase in one kind of assessed value
could reduce property tax rates so much
that tax bills on other property types decline
even if assessed value increased
The county is made up of many taxing districts
if the city saw a rate increase
the homes and businesses
in the tax districts that include that city
might see higher taxes
The property outside the city would not
The net tax is what remains after credits are subtracted
from the gross tax bill
Credits would include things like
local income tax credits, and property tax cap credits
A big increase in local income tax credits
could cause a drop in total net taxes
even if assessed values
and rates increased
Homestead owners make up the largest number of
property tax payers and voters
in each county
so this next chart is devoted to that
A homestead is an owner occupied primary residence
Rental housing and second homes are not homesteads
The paragraph will give you an idea of what
trends and policy changes
might have contributed to the change in
homestead tax bills
The data shows a breakdown of homesteads
which saw an increase,
no change,
or a decrease in their tax bills
and more detailed information
of how much the bill changed
The reasons for change are usually some combination
of the changes and assessments of tax rates
and tax credits
Tamara: In the bottom right corner is a bar graph
showing the tax cap credits by category
Homesteads are capped at 1% of gross assessed value
Other residential and farmland at 2%
and business and personal property at 3%
There's also an elderly credit
which limits the growth of taxes of homeowners
65 and over
Below a maximum income to 2% per year
The amount of tax cap credits
by property type depends on
factors like tax rates,
local income tax credits,
and the composition of property in the county
The chart below the graph shows the change
in tax gaps and the percent of the total levy loss
to tax gaps credit
Did tax gaps credits change in your county?
Tax rates are the most important reason
If tax rates decrease, fewer property owners are eligible
for tax gap credits
so credits decrease
High tax rates tend to increase credits
local income tax credits matter too
Larry: Now comes the really serious chart of tables
The first is the levy comparison by unit for 2010 to 2014
Each local government such as the county, townships,
cities and towns, and school corporations
is its own unit
They each set their own budget, the tax levy
The largest levies in your county will likely be
school corporations,
a city, and the county
Townships, libraries, and other special districts
It's confusing with all of the districts and not units
will make up the smaller levies
Local governments are limited to a maximum levy
by the department of local government finance
The maximum levy froze each year by the
levee froze quotient
which is based on Indiana personal income growth
For 2014, the growth quotient was 2.6%
You will see the changes from 2013 to 2014
will usually not equal 2.6%
not that many will be near this percentage
Some levies like debt service
are not included under the maximum levy
if the unit borrowed to add infrastructure,
the levy may increase much more than
the growth quotient
If the unit paid off some debt, the levy may fall
It's also possible for units to bank maximum levees
from previous years
If a unit was under its maximum for 2013
but increased to its maximum in 2014
The percent rise will be greater than the quotient
You can learn more about levies from the levy video
and the module
your local knowledge will also help you decipher why
a particular units levy change
Tamara: Levies are divided by net assessed values
to figure the tax rates
in each taxing district, the units tax rates are added up
to get the total district tax rate
That's whats shown in the next table
The tax rates are the rates that taxpayers pay
which are the sums of the rates of all the units
in which their property is located
to see individual unit rates, check your county's website
or ask your auditor
the department of local government finance website
has this information too
in the reports section
After a tax bill is calculated
local tax credits are applied
The other columns in this table show the local property
tax credits funded by local options income taxes
Each credit percentage is the amount
that a tax bill is reduced by a property type
PTRC stands for
Property Tax Replacement Credits,
this percentage would be subtracted from the tax bills of
all properties in the district
Homestead credits are subtracted only from
homestead properties tax bills and
residential credits are subtracted from homestead
and other residential property tax bills
The last column shows the effective tax rate
for homestead
which is the tax rate plus the
sum of all the credit percentages
since all credits apply to homesteads
Larry: And finally, we see the property tax cap
or circuit breaker cap
credits by unit
You may recall, the graph we saw earlier showing
the total tax cap credits
in a county by property type
But, now we can see how much of each unit's
levy is lost to the caps
This table really allows us to bring information together
look for districts with high tax rates in the last chart
and with your local knowledge, look at the property tax
losses for the units that make up that district
Where do you see the highest losses?
What percent of the levy is lost?
You will likely see a correlation between the percent
of the levy lost to the tax cap credits
and the district tax rates
rates over 3 dollars will trigger property tax caps
in all 3 categories
Rates over 2 dollars will trigger losses
in the 2% tax category
Homesteads are a little more variable
from county to county because of
homestead deductions and
local credits apply to homesteads
Usually all the overlapping units in a district
with a high tax rate
will have large cap losses
if the percent is the levy
even if that unit's tax rate was low
be sure to check the local credit rates
from the previous table too
If the credit rates are high, tax bills will be too low
to qualify for cap credits
even if district tax rates are higher
Tamara: There you have it,
your 2014 property tax report
It's a lot of information for just a few pages
but it can help you better understand
your local property tax
and lead discussions with local elected officials
and community leaders
Thanks for watching
I'm Tamara Ogle
Larry: And, I'm Larry DeBoer