Tax bills are in the mail, and more than half of property owners will find that they’re paying less than last year.
This year, 55 percent of all taxpayers will pay less, while 42 percent will pay more, and just 3 percent are unchanged.
Homeowners will be the most likely to pay less, as 58 percent of their bills decreased this year; 41 percent will go up; and less than 1 percent will remain unchanged.
This is the second year in a row that few homeowners will pay the same amount as they did the year before. Last year, most tax bills changed after the county reviewed values for all properties. That’s a trend taxpayers should continue to expect each year because of the way counties are supposed to update the value of your home or land, a state tax expert said.
Whether your tax bill went up or down depends on two main factors: the value the county deemed your property is worth and the tax rate of the local governments, including the county, cities or towns, libraries and school districts, that provide services.
Property values, which are used to calculate tax rates, increased countywide by about 5 percent this year, which helped decrease tax rates in most areas. That’s the opposite of what happened last year, when overall values declined, leading to higher tax rates.
But those lower tax rates don’t necessarily translate into lower tax bills. If the value of your home, farmland or business increased more than the change in the tax rate, you’ll pay more this year. For example, the owner of a Center Grove area home will pay about $15 more this year despite the tax rate going down because the value of the house went up $3,800 since last year.
Those small changes from year to year should continue for homeowners because the value of your home is influenced by the actual sale prices of other homes in your neighborhood, Purdue University professor and tax expert Larry DeBoer said. If your neighbors sold their homes for higher prices last year, the value of your house probably went up, which means your taxes probably went up too, he said.
“In the bad old days before the move to market value, frequently people would take last year’s value and write it on this year’s form. So values didn’t change except when there was a big change in assessments,” DeBoer said.
Fewer than 1 percent of homeowners will pay the same as last year, and even people who have hit their property tax caps, which limit how much you pay in taxes, will see changes. The caps prevent people from paying more than 1 percent of the total value of their home in taxes. But in cases such as a home in Windstar in Franklin, the value increased, meaning the capped amount increased too. The owner of that home will have to pay about $16 more this year because the value of the house increased since last year.
“It would be a shame if people thought that the tax cap meant a tax freeze,” DeBoer said.
Farmers are once again the most likely to pay more. Two-thirds of all tax bills for agricultural land increased this year. That’s a little less than last year, when 82 percent of bills for farmland increased.
Farmers continue to see bigger bills because of a state formula that is used to calculate the value of tillable land. Part of that equation is based on a rolling average that takes crop prices and divides them by interest rates to set a base value for the land. Commodity prices have been rising in recent years and interest rates have been low since the recession, so farmland prices have risen steadily, DeBoer said. Prices are starting to level off, but since the average is taken over several years, land values will continue to increase, he said.
About half of business owners and industrial companies will pay more too, and the increases could be large. Of those property owners who will pay more this year, about 45 percent will pay increases of 20 percent or larger for both types of properties.
For those homeowners who will get a larger tax bill, that increase shouldn’t be too much. More than 90 percent of homeowners’ tax bills increased by 10 percent or less.
The first half of your tax bill will be due May 12, with the second half due in November.