LAWRENCE CO. – Tax bills will be mailed soon and most taxpayers will see increases in the assessed value of their property. This could mean increases in tax bills, according to April Stapp Collins, Lawrence County Assessor.
According to Dr. Larry DeBoer of Purdue University, this increase is a remnant of the pandemic. Home prices increased in 2021 as mortgage interest rates fell. More people were working from home and the demand for more space in the family home increased. Corn and soybean prices spiked increasing the value of land ownership.
The shortage of building materials contributed to increased construction costs.
The 2022 pay 2023 tax bills are based on sales data from 2021. The 2021 sales data were used to set the 2022 assessed values. The 2022 assessed values are what the 2023 taxes are based on.
The consequences of the pandemic are showing up in 2023 tax bills with assessed values rising across the
state by 14.6 percent, the largest increase we have seen in 20 years. The standard homestead deduction of 45,000 remains unchanged for pay 2023.
To use Dr. DeBoer’s example, if your home was assessed at $200,000 for 2021 and received a 20% increase in assessed value for 2023 the value then rises to $240,000. When you apply the homestead deduction of $45,000 the assessed value increases from $155,000 in 2021 to $195,000 in 2022 which is a 26% increase in the net assessed value where the gross assessed value only increased by 20%. The taxable assessed value increases faster for lower-valued homes, according to Collins.
Using the above example with different values a $100,000 home with a 20% increase is $120,000. Minus the Homestead deduction of $45,000, the increase is from $55,000 to $75,000 a 36% increase. There was no accommodation made for an increase in the Homestead standard deduction to offset the increase in the assessed value of homes, she added.
Therefore, the taxable assessed values increase even faster, and more so for lower-valued homes. Tax bills will in turn rise faster too.
The tax caps are still in place with 1% on homesteads, 2% on rental housing and farmland, and business
property at 3%.
On average in the state Homestead gross assessed values increased by 15.5% between pay 2022 and pay 2023. Eighty-three counties experienced Homestead gross assessed value in excess of 10%. Lawrence county experienced a 15 to 20 percent increase in GAV, said Collins.
The assessed value of a property for 2022 is effective for taxes payable in 2023 and is influenced by sales throughout the year 2021.
The Indiana statewide average gross assessed value of all property types increased by 13.2% for payable 2023. Lawrence County’s GAV change was in the 10-15% group. Forty-four of ninety-two counties were in this group.
The bottom line is assessments are rising with property values as the Indiana Constitution requires, added Collins.
