How much do I owe in taxes?
I have questions about my Real Estate tax exemptions.
How is the value of my property determined?
The tax assessment and billing cycle begins with the assessor's valuation of your property. Just like other states, in Indiana properties are valued using mass appraisal techniques. With mass appraisal, your property is looked at in conjunction with other properties in your area. Assessors consider age, grade, and condition. Finally, in a process known as annual adjustment, or "trending", each year real property sales data is used to determine if the value of properties in your area should change to match the market value found in the sales of recent properties. The county is broken into 4 sections, and each section is visually looked at every 4 years for the annual reassessment.
I feel the value is too high. Is there anything I can do?
If you disagree with the assessed value, please contact our office at 765-668-4773, to discuss your concerns. If we are able, we will handle any corrections immediately. If this is not possible, the owner has the right to appeal any assessed value up to 45 days after the date a Form 11 Notice of Assessment Change is mailed, or, if no notice was mailed, up to 45 days after the date of the first installment tax bill. The appeals process is very straight forward and taxpayer-friendly, providing you with the opportunity to have your questions answered according to a statutory procedure. If, in the appeal process, you are not able to resolve the issue with the County, you will have the ability to present your concerns to the Property Tax Assessment Board of Appeals (PTABOA). From there, you also have the option of appealing to the Indiana Board of Tax Review.
What is a GRM? Why do I need to provide my rental income information?
A GRM is a Gross Rent Multiplier, or a ratio of sale price to rent.
- Rent * GRM = Assessed Value
An example would be:
- 521 Market St. sold for $35,000 in 2011 and currently rents for a market rent of $500. The annual GRM for this property would be $35,000 / 500 = 70 or a monthly GRM of: ($35,000/500)/12=5.83.
GRM's can vary throughout the county as they are based on actual sales and the reported rents of residential properties for each area.
In order to accurately and uniformly assess income properties, we need this data to establish what actual market rents in a particular area are and to determine any trends as time goes by. Per IC 6-1.1-35-9, any information pertaining to income and expenses are constitutionally protected and will remain confidential. We are unable to price any new rental properties with the income approach without signed verification from the owner or signed copies of current leases.
How do I get a rental deduction?
Unfortunately, there is no "rental deduction" in Indiana. Real estate in Indiana is valued based on “market-in-use". Rental properties are typically purchased with the intent of investment, not as a primary residence, therefore, investors typically will purchase for a lower price. An income property owner will need to complete a rental questionnaire and supply a copy of the current lease with the County Assessor’s office. When this information is filed, we are able to value the property based on sales of other residential rentals through the use of a gross rent multiplier, usually, though not always, resulting in a lower assessed value. This is simply using another approach to value, not an actual deduction or exemption.
I purchased a property for a family member to live in. They do not pay rent. Does my property qualify?
If the family member is not on the deed and is living in the property as a tenant, not qualifying for the homestead exemption, then, yes, the property can be valued with the income approach. In situations where below or above market rent is charged, we will use the estimated rent for the area. This ensures uniform assessments for all income properties in the area.
I’m renting my property as a “Rent to Own.” Why doesn’t this qualify?
Rental properties are valued using the Income Approach for properties that have been purchased as income investments with no intent to sell to the tenant. Rent-to-Own is basically an unrecorded contract to sell the property. If the contract to sell is recorded, then the tenant would be able to apply for various exemptions, including the homestead.
I purchased my property through the Grant County Tax Sale. Why aren't tax sales used when assessing income properties, especially if they are the predominant sales?
A property is entered into the County Tax Sale after the owner has not paid three consecutive tax bills. The value is based on the taxes owed, not the actual market value of the property. Therefore, these sales are not included in any studies. These properties may also be purchased with the intention of income, based on likelihood of redemption by the owner and subsequent interest payments to the purchaser.