Homestead Exemption with a new Rental

[Erin Weiss]

I'm in the process of buying a SFH. The previous owner was a senior woman who filed for a homestead deduction as well as one for seniors which resulted in her property taxes to be only $11 a month!!! Wow that's LOW!

Now that I'm taking over the home as an investment property, I won't be able to file homestead or a senior deduction so I know my taxes will go up a LOT.

My question is....when will my taxes go up and will they be adjusted automatically? I'm assuming maybe at the first of the year they will increase? Is there any way to find out exactly what my property taxes will be when it does increase?

[Ed S.]

Erin,

I'm assuming you are talking about an Indy property.

You will lose both exemptions in 2014. To be safe, calculate your tax starting in 2014. Seller should cover 2013.

In Indiana, primary residences are taxed at no greater than 1% assessed value. Rental/income properties are capped at 2%. Assessed value is neither sale price nor appraisal value. It's a complex calculation that most assessors, can't (or won't) even explain.

You can determine your assessed value by going here: http://cms.indygov.org/MyAssessedValue/

You can also appeal once per year, but be aware that some assessors punish those that appeal by raising rather than lowering the tax bill. This happened to me in Indy.

Hope this helps. Good luck!

Ed Simcox