With hot home market, assessments will be rising | Local News

On the heels of a hot sellers’ real estate market, with home sale prices up 19% to nearly 26% in Vigo County, property tax assessments are also up.

Vigo County’s property assessments rose more than $515.2 million between 2021 and 2022. The county’s total assessed value increased to more than $6.79 billion from more than $6.27 billion.

The new assessments mean property owners will see higher taxes in the future.

“Realistically, we all can expect to pay a little more in taxes next year based on assessments,” said Vigo County Assessor Kevin Gardner. “But it will not be as bad as the assessment looks.”

That’s because property taxes were capped in Indiana in 2008, which limits an owner’s property tax burden to a fixed percentage of the property’s gross assessed value.

Residential property taxes are capped at 1% of property value, while apartments and agricultural structures are capped at 2%. Commercial and all other property is capped at 3%.

As an example, if a home valued at $200,000 rose to $220,000, “then the owner would pay no more than 1% of $20,000” which is the increase in assessed value, or $200, Gardner said.

“I have had people call me and say my assessment went up $1,500 and I cannot afford $1,500 in taxes. Well, it is not. That is the property assessment and your tax is based off of that,” he said.

“We are supposed to be market value on assessments,” Gardner said. “Our assessment is supposed to be what you sell (your property) for in today’s market,” Gardner said. “We know this has been a crazy market, especially for housing. It doesn’t matter, we are still supposed to be at market, so our assessments are to follow. And as that market cools, our assessments should follow,” he said. .

Developer Rick Jenkins said he thinks the housing market will cool down, especially as many buyers are paying cash for homes.

“People are starting to pay more for a mortgage and the stock market has gone down, so the people who are paying cash cannot pay as much because their assets are going down,” Jenkins said.

Troy Helman said home sale prices increased 19% in 2021 and are up nearly 26% so far this year. Helman is a member of the Indiana Real Estate Commission and a Realtor for Coldwell Banker Real Estate Group, which has 60 offices in four states — Wisconsin, Michigan, Illinois and Indiana.

“It is not uncommon to have a $120,000 house and have someone pay $150,000 for that house,” which is a 25% increase, “and have eight offers” on the house.

“Common sense tells you (the housing market) has to cool, but I don’t see the housing inventory changing greatly in the near future. I don’t see anything to bring more homes on the market,” Helman said. “There may be less buyers, but there will still be a higher demand because the housing inventory is so low, it is desperately low,” he said.

“I don’t see a change in the near future on inventory at all and we will have a low inventory for a while. But you can’t help but think with interest rates going up, it will slow the housing market, which seems common sense. But I can say at this point, it is not. We still have houses with multiple offers” with buyers paying more than asking price.

Property tax assessments were mailed April 29, with more property owners receiving them on May 1. The notice of assessment is called a Form 11, which shows the value of land and buildings and any changes from the previous year.

In a look at Vigo County’s 2022 assessment, which is included in a calculation for a tax bill payable in 2023, residential assessment increases ranged from 4.5 percent to 9.5 percent, while commercial tax assessments ranged from 11.5% to 17%, Gardner said.

The total increases countywide shows residential property tax assessments increased 8.1%, while commercial property assessments rose 9.1%.

Assessed values ​​for residential property rose to more than $3.97 billion in 2022 from more than $3.68 billion in 2021, while commercial property increased for 2022 to more than $1.39 billion, up from more than $1.27 billion in 2021.

“That is based on construction costs and new (cost) tables we were given by the state,” Gardner said.

Agricultural property assessments increased 13%.

“The state increased the agricultural land (assessment value) from $1,290 per acre to $1,500 per acre,” Gardner said, “so farm ground went up.”

The assessed values ​​for agricultural land in the county rose to $444,546,200 in 2022 from $393,443,000 in 2021.

While assessments are up, the percentage of each assessment category remains nearly the same, with the exception of agriculture.

Residential property assessments comprise 59% of the county’s total assessed value, with commercial accounting for 20%. Agricultural assessments increased to 7% from 6% of the county’s total assessed value.

Government owned and exempt property represent a large chunk of assessed value that is not taxed.

“We have nearly $1 billion of assessed value between government agencies, churches, schools and colleges and non-profit agencies,” that are not taxed, Gardner said.

While tax exempt property assessments rose 5.4%, its share of the county’s total assessment dropped to 14% from 15% as farmland assessment rose. Exempt property assessment rose to $974,513,600 for 2022 from $924,255,500 in 2021.

What property owners will pay next year in taxes is based on assessments plus government budgets, which typically have increased to the maximum levy since property taxes were capped, which then set a property tax rate.

However, property owners will pay different tax amounts based on property tax deductions, such as homestead deduction, mortgage deduction, if a property owner is over 65 or is a disabled person, among others, which can lower a final tax bill.

Reporter Howard Greninger can be reached 812-231-4204 or [email protected] Follow on [email protected]

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