Property owners are experiencing sticker shock as they receive new assessment values. The increase in assessed value is due to the state requirement of assessing property in Indiana according to market value in use. These mandated guidelines have been in effect since 2002.
In a market or neighborhood where property values are increasing, that leads to increases in assessed values. Assessments lag behind because data is collected from home sales from the past year. There has been a significant increase in home sale prices and that is reflected either up or down in the following years assessment.
Simply put, if your home had a value of $100,000 and homes have been built or sold around you for higher prices due to the market changes, your home mostly likely has risen in value and the new assessment will reflect that higher value.
Sales Disclosures are required to be filed with the Assessor’s Office for every property sale in a county. Sales information is sent to the State of Indiana for their analysis and for the public’s information.
Assessors use the sales data to compare like properties and like sales in the different market areas of their county. An analysis is performed between the sales data and the assessments. If sales are higher than assessments, then they will trend upward. If sales are lower than assessments, then they will trend downward. These trending factors will be applied to all properties even if they have done nothing to the property. Property assessments should be within 10% of market value sales to meet the state’s requirement. Across the state assessed values or property experiencing the biggest increase in 20 years.
In Dubois County, there have been large increases in market sales for the past few years. The Assessor’s office has kept assessment increases down for the past three years to see if the market sales were stable or not.
In Dubois County for example, market sales appear to have stabilized so the full assessment was certified for January 1st of this year.
Percentages of increases will not be the same among properties. There are not many properties that are exactly alike for that to be the case. It depends on what the previous assessment was and where it needed to be for January 1st, 2023 to meet the obligation of assessing properties within 10% of market value.
The increase in assessed value does not necessary reflect the same in taxes. Property tax bills are a calculation of several variables such as assessed value, government levy amounts of counties, cities, townships, schools to some extent, and special districts along with assessed value deductions such as homestead credit and even property tax replacement credits from local income taxes. It can be very complicated.
Earlier this year you may have noticed that property taxes increased. The increase is also a result of the pandemic along with assessed value changes over the past years. Property values went up significantly starting in 2021 as home prices increased. Farmland prices also increased in addition to construction costs due to shortages of building materials.
Property owners should consider the following questions in reviewing their assessment for January 1, 2023. Is the new assessment close to the market value? Do you think you could sell your property for the current assessment valuation?
If property owners have reason based on market value that their property assessment valuation is incorrect an appeal can be filed with your county’s Assessor’s Office by June 15, 2024. They will need to complete a Form 130. Include information that supports your opinion of market value for your property.
This article was created in collaboration with the Dubois County Assessor’s Office, ensuring all details are accurate and factual.
