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Indiana real estate assessments still confusing

By ANN HINCH
Assistant Editor

WINCHESTER, Ind. — Even with real estate property tax caps and a homestead credit enacted by Indiana’s General Assembly earlier this year, not everyone’s tax bills are going down – and some that do, are not going down by much.

Albert Funk, who owns six 40-foot-by-160-foot lots in Lynn, in Randolph County, saw an increase in their assessed valuation this year.

On two of the lots he has a house and a garage, which he ran as an auto repair business for many years. In 1942, he bought the six undeveloped lots for a total of $150.

This year, the assessed value of the four undeveloped residential lots is $3,700 each; last year, it was $3,400 each. He said the value of the two developed lots is higher, but he could not remember the figure. His total tax bill increased about $100 on last year.

“I’d be lucky to sell them at $500 a lot,” opined Monte Cowen, managing broker of the Winchester, Ind., Century 21 office.
Cowen, who is also the Greensfork Township trustee, has known Funk since Cowen was a child and is now helping the 88-year-old appeal his tax bill to the county assessor’s office. This is one of his duties as trustee.

“For the life of me, I can’t figure it out,” Cowen said of the lots’ increased value.

He explained they are “landlocked” from any street and Funk uses a vacated alley as a driveway.

Nearby Winchester has only between 5,500-6,000 residents, he added, with two big factories, but static economic development. Nearby Spartanburg lost its school in consolidation.

Between 2002-06, he said the area was the best housing market in the region, with homes selling for 30-40 percent higher than their assessed value. Now, there are many foreclosures and houses that do sell are going for 20-25 percent below assessed value. In 2007, Cowen said most residential properties saw tax relief, but assessed value went up for land.

Funk said he once offered two of his empty lots free to a neighbor. The neighbor learned it would cost more to appraise the land than it was worth and refused.

“I can’t even give them away,” Funk said, “but still, they’re (assessed) at $3,700.”

Don Jones of Union City said his tax bill went down between 6-7 percent this year on 10 acres – about $100 – but the assessed value went up from $139,000 to $149,000. He said he read a couple of months ago that the state projected a statewide average decrease of 30 percent from last year’s property tax bills.

“I haven’t heard anybody getting 30-45 percent,” Jones said. “I’ve already paid more than $100 (his discount) on sales tax” for a new bush hog. (State sales tax was raised 1 percent as of April 1 to compensate for income lost to property caps.)

He said a local real estate agent told him the property probably wouldn’t even fetch $89,000 on the market. In addition, his daughter lives in a nearby house on which she is paying the mortgage, but he is listed as the property owner – taxes on that went up $200 and he said there was no tax cap or credit, because he is considered a landlord (the first cap on that, 2.5 percent, kicks in next year).

“I don’t mind paying taxes, but it keeps going up, up, up,” Jones said.

Based on similar properties

Randolph County Assessor Bev Fields took over her office on Jan. 1, 2007. She said none of the legislature’s tax caps will take effect this year, but for residences, it did raise the homestead credit from $30,000 to $45,000, or 50 percent of property valued below $90,000.

(Example: A $200,000 house would be taxed on $155,000, but a $75,000 house would be taxed on $37,500.)

She said her office establishes the assessed value and turns that information over to the county auditor, who figures individual bills with any applicable credits. Finally, this is sent to the county treasurer for bill mailing and collection.

“We can’t do a thing about their tax bills,” Fields said, “but we can look at their assessments.”

She said last year’s assessment reflected new state-mandated “trending,” which means the state went from one-third true tax value to market value in use.

A property is assessed based on the sales of similar properties in its neighborhood. The county contracts out to a private contractor the ratio study done each year to make these determinations, rather than the assessor’s office conducting the study itself.
The last countywide reassessment was in 2002; the next is scheduled for July 2009. Fields said this does not require the appraisers to go into a residence at each property – what they’re mainly looking for are new structures for which a permit might not have been obtained and reported to her office, or the razing of structures formerly on county records.

She said landowners have filed more appeals this and last year than in years before, to her knowledge – between 400-500 each year so far. Of last year’s, about 20 went to the Indiana Board of Review; the others, she said, were resolved locally. She said the county has lost manufacturing jobs, and pegged land values at average or below-average compared to the rest of Indiana.
“Our goal is to correct any blatant errors there may be in that assessed value,” she said, adding an appraiser will visit a disputed property to help with decision-making.

10/8/2008