How to Read a Property Tax Report
It's Thanksgiving, and here's one thing I'm thankful for: the Legislative Services Agency's county property tax reports for 2015. You can find them on the General Assembly's website at http://iga.in.gov. Click on "Publications," then "Property Tax Studies."
Let's use a report to tell a property tax story. How about a county with assessment, levy and rate changes similar to the whole state's in 2015. Like Kosciusko County. But you can follow along with your county's report.
There's a dashboard at the top showing that Kosciusko's net assessed value, or AV, increased 4.2 percent from 2014 to 2015. Net AV is taxable assessed value, after deductions. Each county report has a section about statewide trends at the bottom of the first page, and it says that state net AV rose by 3.75 percent in 2015. Kosciusko was a bit above average.
Why did assessed value increase? The chart on the first page shows gross assessed value changes since 2007. Gross AV is the value of property before deductions, and 2007 was the year before the big property tax restructuring. In Kosciusko the green line stands out – that's agricultural property. Its AV was up about 65 percent since 2007. This was true almost everywhere in Indiana, the result of the rise in the statewide base rate of farmland.
A table at the top left of the second page shows Kosciusko's breakdown of gross and net assessed values by property type. Agricultural net AV grew by 11.3 percent, business grew 4.5 percent and homesteads grew 4 percent. Other residential property dropped a little.
Kosciusko's total property tax levy increased by 2.7 percent in 2015. The statewide increase was 2.8 percent. Page 3 shows the levies by unit for the years 2011 to 2015. Most of Kosciusko's levy was in the county, Warsaw City and two big school corporations. The county and city had larger increases in 2015, but this was mostly offset by a big drop in the Wawasee School Corporation's levy.
The tax rate is the levy divided by net assessed value. Since net AV increased more than the levy, the average tax rate in Kosciusko decreased, by 1.4 percent. The statewide average rate fell by 1 percent, the first such drop since the tax restructuring of 2008.
Tax rates by taxing district are shown on page 4. A taxing district is an area in the county where the same units of government overlap. Taxpayers pay the sum of the rates of the governments in a district. Rates in Kosciusko ranged from 84 cents to $3.40 per $100 assessed value. How much you pay depends on where you live.
What really concerns people, of course, are property tax bills. A table at the lower left of Page 2 breaks out homeowner tax bills. The average homeowner in Kosciusko paid 0.6 percent more in 2015. More homeowner tax bills went down than up, but about 9 percent of homeowners saw tax bill increases of 10 percent or more.
A bar chart at the upper right of Page 2 shows changes in total net taxes for six property types. Taxes increased for all types except non-homestead residential. Agricultural and personal property business equipment taxes increased the most.
Net taxes are different from the tax levy because tax cap credits are subtracted. These are credits that taxpayers receive to reduce their tax bills to the Constitutional tax caps. In Kosciusko tax cap credits were only 1.8 percent of the levy. Here Kosciusko differed from the state. Statewide, credits were 10.4 percent of the levy.
A bar chart at the lower right of Page 2 shows a breakdown of Kosciusko's tax cap credits. More than half were in the 2 percent category, which means that most credits were cutting the taxes for rental housing and second home owners. There's a table on Pages 5 and 6 that show tax cap credit losses by local government. Nappanee City lost 23.5 percent of its levy to the credits because it's in the tax district with the highest tax rate. Where tax rates are high, taxpayers receive more credits, and local governments lose more revenue.
That's just Kosciusko's report. There are 91 more, and a statewide report is coming soon. Take a look at your county's report this holiday if the Thanksgiving turkey tryptophan doesn't knock you out.