In Indiana, property owners all pay property taxes twice a year, once in May and again in November. The tax amount owed is a result of two things, the tax rate and the assessed value. Many times the question comes up as to why the assessed value of the property changes every year, regardless of whether there is a change made to the property. This occurrence is referred to as an annually adjusted property value or trended value. But what exactly does that mean? Let’s start with a little background.
In 1999, the Indiana Supreme Court ruled that the previous system that involved reassessing properties every 10 years was unconstitutional. This ruling forced the State legislature to devise an assessment plan that better reflected a market relatable values. Indiana lagged behind most of the country at this point, since almost all 50 states had already changed their assessment systems to reflect local market conditions. In 2002, the state began shifting their process and moved to what is known as a market value in-use system of assessment.
To accomplish this task, assessors implement annual adjustments or trending within each taxing district throughout the state. This involves calculating differences between the prior year assessment of a property and current or more recent sales data from similar properties. In the case of residential properties, sales of like homes within similar neighborhoods are collected and analyzed. For commercial or industrial properties, market data is compiled for property types within each class to make a determination. Once the difference is determined, either positive or negative, a factor is created so the assessor can adjust values closer to what the market value-in-use would reflect.
The ultimate goal here is to eliminate the large, lump sum “catch-up” adjustments that occurred under the old system of 10 year assessments. Because property values consistently rise and fall over time, trending is designed to make value determinations appear more realistic. As a result, taxpayers may see a concurrent rise or fall in their assessments from year to year. Or, sometimes the may even see no change at all.
How do you know your assessment is correct?
Your assessment should be reflective of what a willing buyer would pay for the property at the time of assessment. For instance, for 2019, the assessment date is January 1, 2019. If your 2019 assessment is accurate, it should represent approximately what your property could have sold for on or near January 1, 2019. If your assessment is inaccurate, the value will be something other than what normal market conditions will dictate at that time.
Innovative Property Tax Solutions can help make that determination for you and represent you throughout the process of having incorrect values corrected. Our team of Level III Certified Assessor/Appraisers have many years of experience and training in market analysis, cost reconstruction, and income based assessment analysis. We make sure your assessments are correct and accurately reflect market value, ensuring you are only paying your fair share in taxes and nothing more.