Property Taxes Are Still a Concern in Indiana

Recently, I had a reader contact me asking questions pertaining to filing a property tax appeal.

I began to think that the question he asked may be question that other readers may have, but were afraid to ask.

His question was pertaining to how to obtain the parcel or key number if you live in other counties besides the ones highlighted in the video series below:

Property Tax Appeal Review (Video 1 of Section 1)

Indiana Property Tax Appeal (Part 2)

You can search for the parcel number and the basic information needed to fill out your appeal form by visiting http://beacon.schneidercorp.com.   On this site you will be able to find the parcel number for all 92 counties in Indiana.

The parcel number is an eighteen digit number it is used by all 92 counties.The parcel number itself is significant.  How, you ask?  The 18-digit State Key PIN is made up of the following parts: (2 digit County Code; 45 for Lake County) – (2 digit Township Number) – (2 digit Section Number) – (3 digit Quadrant Number) – (3 digit Parcel Number) . (3 digit Class Number; usually 000 for Noble County) – (3 digit Tax District Number).  For example, the following PIN, 45-08-28-202-029.000-004, is in: Calumet Twp (08), Section 28 (28), 202 Quadrant (202), parcel number 029 (029), class number of 000 (000), and Calumet township taxing district (004).Each county has a two digit number that represents that county.

I hope this helps you file your appeals.

Surviving a Recession in Real Estate (Part 5)

Reducing cost on maintenance is accomplish by planning major repairs.  If the property needs a roof, plan and budget for that repair.

Each month that you receive the rental payment the money should be divided by expense then the remaining would be considered profit.  For example, if the annual property taxes are $1200 then the monthly property taxes are $100 a month.   If the annual insurance premium is $850, then the monthly insurance premium is $70.83 month.  If there is a mortgage, the principal and interest payment maybe $250 a month.  The real estate investor needs to account for maintenance, as well.  Most real estate investors that I spoke with and including myself use $75.00 each month for maintenance.  The investor may want to consider setting aside some money for accounting and legal fees from the monthly rental amount, as well.  Fifty dollars for both should be sufficient.  This amount will give you more than enough to cover the additional income tax preparation fees when filing income taxes.

To recap, the monthly expenses are:

$50.00 accounting/legal

$75.00 maintenance

$250.00 principal and interest (mortgage)

$100.00 property taxes

$70.83 insurance

$545.83

This example has a three bedroom home that currently rents for $750.00 a month, after expenses, the investor has a profit of $204.17 a month or $2450.04 annually.   Pretty good, huh.

Well, this too may need to be evaluated for cost reduction so that your profit margin can be increased.  You may want to consider refinancing for a lower rate this one change alone may save you hundreds monthly,  and thousands in interest payments, annually.  You may want to consider an area where the rental values are higher when purchasing your investment property.

You may want to increase your insurance deductible, thereby reducing your annual insurance premium.  An important note here, unlike your auto or health insurance, the deductible for landlord insurance or home insurance is taking out of the claim payment.

What Is Assessed Value and How Does It Influence My Property Tax

Originally posted 2008-12-23 15:35:34. Republished by Blog Post Promoter

In Indiana, the property tax that is paid on a home, land, building, business machine, or product for sale is determined by the assessed value that the assessor assigns to the asset.  Once the assessed value is determined the amount of property taxes paid on that value is determined by the tax rate for the city in which the property is located.

The tax rate is a very important part of the equation because the tax rate is determined by the budget the town officials believe is needed to run the city.  Items that are needed to run a city vary, but most city rely on property taxes to provide the following items to the citizens of that city:

• police
• fire safety
• library
• school
• health care department
• trash pick up

Some cities have all of these items on the property taxes making the cost to run the city very high.

Now, that the basis of what is included in the property taxes have been discussed.  Let’s look at the changes due to re-assessment of property taxes in Indiana.  In December 1998,  the Indiana Supreme Court ruled that the assessment value that was being used was unconstitutional, and the state needed to convert to market value.   Market value is thought to be more uniformed and fair.  It also satisfy the Supreme Court.   However, the change would cause an unfair change in property taxes adjustment to the homeowner.  The homeowner would see an increase of up to 33% and the business owner taxes would see a decrease of up to 18%.

In an effort, to reduce the burden that the reassessment was having on the homeowner, the Indiana General Assembly develop a bill to protect the homeowner.  The bill was to increase the sales tax to offset the property tax burden.  However, the bill did not solve the entire problem, and now the state is considering an uniformed flat rate of one percent of assessed value for homeowner, two percent of assessed value for landlord or investor, and three percent of assessed value for business owners.

Real Estate Investor Related Articles

Protecting Your Investments – This article discusses the business entities that are available that are available for investors to protect their personal assets when buying and holding properties.

Property Tax Related Articles

Indiana Property Tax Appeal (Part 2) -Filing a property tax appeal can be difficult.  This article gives links to the forms needed to file the appeal and a video tutorial on filling the forms out.

Related articles on property taxes

• Talk turns to tax hikes (theolympian.com)
• States and Towns Lean on Taxpayers (online.wsj.com)

It Is Time To Make A Stand

Is your NIPSCO bill and the potential rate increase getting you down? Is the property tax increase making you want to move to another state?
“Revolt at the State House”

There is something you can do.  For the NIPSCO bill, you could voice your opinion to the regulatory commission.  For property taxes, you can join the

Join the citizens of Indiana in a Revolt at the State House on March 25, 2009 at 11:30 am. 

Never before does a citizen need to make a stand and voice his or her opinion. 

Why is this important?

Well, the legislators willingness to incorporate a two percent circuit breaker should be all the evidence needed to say that even the legislators knew the property tax reassessment and trending was unfair.  However, if you still need more evidence, let’s examine.

The homestead exemption went from 35,000 to 45,000 after a few citizens or should I say a whole organization like Greater Northwest Indiana Association of Realtors and citizens of Lake, Porter, Marion, and other counties complained at the state house.

Still need more evidence.  Some cities and counties received demands to cut the fat out of their government i.e. get rid of Hummer (Gary) due to high tax rate.  2007 Gary’s tax rate was 9.62.  2008 Gary’s tax rate is 7.62.  2008 East Chicago’s tax rate is 9.62.

I am willing to bet that the high tax rate coupled with NIPSCO’s proposed electrical rate increase in some way contributed to the surge in unemployment rate in Northwest Indiana.

If accountability is important to you then stand with citizens of Indiana on March 25, and let legislators know “yes we can” have a lean government and still get all the services that every citizen pays his or her hard earned money for.

Get Ready to Move Out of Lake County

The recent action or inaction of Lake County’s officials caused the Governor to take controversial stand against Lake County that may cause the tax payers of Lake County to pay higher property taxes. 

Governor Mitch Daniels is quoted as saying, “the government reforms will move forward, even if it means leaving Lake County behind to face higher property taxes.”

Once again, Lake County is faced with “pulling themselves up by the boot straps” and changing their own destiny.

The officials of Lake County believe that the citizens of the county will not support Kernan-Shepard reforms.  The reforms are discuss in a recent blog at Are the Reforms Governor Daniels Proposed Going to Affect You?

I do not believe that the Lake County officials are “in touch with” the citizens of Lake County.  The citizens of Lake County do not want to pay high taxes, so it may be time to move out of Lake County.  Call Taylor-Brown Real Estate at 219 803 4489 for help with finding your new home in Porter or LaPorte Counties.

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