Benjamin Franklin is famously quoted for saying “in this world nothing can be said to be certain, except death and taxes.” As real estate agents, property taxes are something we think about more than most. However, we believe it is important for everyone to have an understanding of the basics. So here we go-
- Property taxes are calculated based on the assessed value of your home. This value applies specifically to taxes and often varies compared to the market value of your home.
- If you have a mortgage on your home, most likely your property taxes are paid directly out of your escrow account. However, if you own your home outright you pay your taxes twice a year directly to the state.
- Both the interest paid on your mortgage and your property tax payments are tax-deductible expenses.
- You may be eligible for property tax deductions or exemptions if you meet certain criteria. Some of the most common exemptions in Indiana are available to people who are a veteran, disabled, over the age of 65, have a mortgage or use their home as their primary residence. You can see the complete list here.
- After you purchase a home, you MUST reapply for any property deductions that you are eligible to receive before December 31. The deductions that are applied at the time you purchase a home do not carry over automatically to the next owner.
- The largest source of income for property taxes in Indiana comes from residential properties. Followed by commercial and personal.
- The average annual property tax paid in Indiana is $1,100. Interestingly, this is nearly half the national average.
If you would like to learn more or have questions, please contact us and we would be happy to assist!