With the hot domestic market, valuations will rise | Local News

On the heels of a hot sellers’ real estate market, with home sales prices up 19% to nearly 26% in Vigo County, property tax assessments are also up.

Property assessments in Vigo County have increased by more than $515.2 million between 2021 and 2022. The county’s total property value has increased to over $6.79 billion from over $6.27 billion .

The new assessments mean homeowners will see higher taxes in the future.

“In reality, we can all expect to pay a little more in taxes next year based on the assessments,” said Vigo County assessor Kevin Gardner. “But it won’t be as bad as the assessment looks.”

This is because property taxes were capped in Indiana in 2008, which limits the property owner’s property tax liability to a fixed percentage of the property’s gross assessed value.

Residential property taxes are capped at 1% of property value, while apartments and farm structures are capped at 2%. Commercial property and all other property are capped at 3%.

For example, if a house worth $200,000 increased to $220,000, “then the owner would pay no more than 1% of $20,000”, which is the increase in assessed value, i.e. $200, Gardner said.

“People called me and said my assessment had gone up $1,500 and I couldn’t pay $1,500 in taxes. Well, it’s not. property assessment and your tax is based on that,” he said.

“We’re supposed to be market value on appraisals,” Gardner said. “Our valuation is meant to be the price at which you are selling (your property) in the current market,” Gardner said. “We know it’s been a crazy market, especially for housing. Regardless, we’re still supposed to be in the market, so our valuations should follow. And as that market cools, our valuations should follow,” he said. he declared. .

Developer Rick Jenkins said he thinks the housing market will cool, especially since many buyers are paying cash for homes.

“People are starting to pay more for a mortgage and the stock market has gone down, so people paying cash can’t pay that much because their assets are going down,” Jenkins said.

Troy Helman said home sales prices rose 19% in 2021 and were up nearly 26% so far this year. Helman is a member of the Indiana Real Estate Commission and a realtor for Coldwell Banker Real Estate Group, which has 60 offices in four states – Wisconsin, Michigan, Illinois and Indiana.

“It’s not uncommon to have a $120,000 house and someone pays $150,000 for that house,” which is a 25% raise, “and has eight offers” on the house.

“Common sense tells you (the housing market) needs to calm down, but I don’t see housing inventory changing much in the near future. I don’t see anything to bring more homes to market,” Helman said. . “There may be fewer buyers, but there will always be higher demand because the housing stock is so low, it’s desperately low,” he said.

“I don’t see any change at all in the near future on stocks and we will have a low stock for a while. But you can’t help but think that with rising interest rates it will slow down the housing market, which seems like common sense. But I can say that at this point, it’s not. We still have homes with multiple offers,” with buyers paying more than the asking price.

Property tax assessments were mailed out on April 29, with more homeowners receiving them on May 1. The Notice of Assessment is called Form 11, which shows the value of land and buildings and any changes from the previous year.

Looking at Vigo County’s 2022 assessment, which is included in the calculation of a tax bill payable in 2023, residential assessment increases ranged from 4.5% to 9.5%, while tax assessments trading ranged from 11.5% to 17%, Gardner said.

Total countywide increases show that residential property tax assessments increased 8.1%, while commercial property assessments increased 9.1%.

Residential property assessed values ​​increased to over $3.97 billion in 2022 from over $3.68 billion in 2021, while commercial properties increased for 2022 to over $1.39 billion , up from more than $1.27 billion in 2021.

“That’s based on the construction costs and the new (cost) tables that the state gave us,” Gardner said.

Farm property assessments increased by 13%.

“The state has increased farmland value (assessment value) from $1,290 per acre to $1,500 per acre,” Gardner said, “so farmland has gone up.”

Assessed values ​​of farmland in the county have increased from $393,443,000 in 2021 to $444,546,200 in 2022.

Although ratings are on the rise, the percentage of each rating category remains virtually the same, with the exception of agriculture.

Residential property assessments make up 59% of the county’s total property assessment value, with the commercial portion accounting for 20%. Agricultural assessments increased from 6% to 7% of the county’s total assessed value.

Government-owned and exempt property accounts for a large portion of assessed value that is not taxed.

“We have nearly a billion dollars of assessed value between government agencies, churches, schools and colleges, and nonprofits,” which are not taxed, Gardner said.

While tax-exempt land assessments increased 5.4%, its share of the county’s total assessment fell to 14% from 15% as farmland assessment increased. The exempt property assessment has increased from $924,255,500 in 2021 to $974,513,600 in 2022.

What property owners will pay next year in taxes is based on assessments plus government budgets, which have generally increased to the maximum levy since property taxes were capped, which then set a property tax rate .

However, homeowners will pay different amounts of tax depending on property tax deductions, such as homestead deduction, mortgage deduction, if a homeowner is over 65 or disabled, among others. which can reduce a final tax bill.

Reporter Howard Greninger can be reached at 812-231-4204 or [email protected] Follow on Twitter @TribStarHoward.