Illustration by Jay Vollmar
PROPERTY TAX ONLY GOES UP, but over the last few years it’s really gone up, fueled by a massive increase in home prices that began when Covid created a shortage of new construction. Buyers are paying top dollar for anything they can find. Since residential property tax is based on assessed home prices in the area, tax has risen along with real estate inflation. In 2023 alone, homeowners saw it balloon by an average of 17 percent statewide. Our primer explains why, how, and what you can do, realistically, if you believe your property tax is too high.
How much you pay is based on the net assessed value of your home.
Your county assessor, using formulas only slightly less arcane than those needed to cast a Patronus Charm in the Harry Potter books, determines the gross assessed value of your house. Factors such as the prices at which other properties in your area were sold during the previous year weigh heavily. Deductions you’re entitled to are then subtracted, which produces the net assessed value. The local property tax rate is then applied to this figure, resulting in your tax payment. For instance, Indiana’s average 2024 rate is 0.77 percent, so a home with a $300,000 value would be taxed at $2,310. Remember, that 0.77 is an average for the entire state. That makes all the difference.
Property tax rates are under the control of local governments, so they vary markedly.
Eyeing a place in Fishers? Plan on a slightly more than 2.2-percent property tax rate calculated into your mortgage payment. The median rate for all of Hamilton County is 2.02. In Marion County, it’s 2.77, but Beech Grove Center District takes a county high of 4.67 percent.
Assessments are made annually, and that’s a good thing.
Your tax for 2024 is based on the 2023 assessment; next year’s tax will be based on this year’s assessment. Prior to 2002, property assessments were sometimes only done at five-year intervals or even once a decade. Not surprisingly, this could produce sudden, massive increases, which produced equally sudden, massive outcries from voters. Annual assessments dulled the pain—like adding a teaspoon of hot sauce to a pot of chili instead of putting the teaspoon straight into your mouth. Even so …
Taxpayers still seem to find property tax particularly galling.
Activists (and that crazy uncle you only see at Thanksgiving) have made a lot of hay by characterizing it as government “rent” that homeowners have to pay in perpetuity to keep a roof over their heads. Rage over large, unexpected increases has ended political careers and even changed the course of history. For instance, in the late 1970s, California property tax increases led to a voter rebellion that ended with the passing of Proposition 13, which to this day limits Golden State property tax to 1 percent of the property’s assessed value. Some say this movement helped spark the rise of Ronald Reagan and modern conservativism. Back here in Indianapolis, Mayor Bart Peterson was considered a shoo-in for reelection in 2007—until he announced a substantial property tax increase. Thanks to that fiscal misstep, he lost soundly to political newcomer Greg Ballard.
The fact that property tax so often becomes a lightning rod for voter anger is a huge issue, because it pays for a great many important things.
Recall that property tax is assessed and collected not by the state but by local government officials in counties, cities, and towns. So it’s used not for nebulous, faraway “programs,” but for tangible, measurable efforts that are often right down the road from the homes being taxed. The list includes (but is by no means confined to) public schools, parks, roads, police and fire departments, and libraries.
If you fail to pay your tax, you could indeed lose your home.
But it would take a while. They say the wheels of justice turn slowly, but in delinquent property tax cases, that’s acutely true. And there are plenty of chances during the intervening years—yes, years—for delinquents to pay up and get back in their county’s good graces.
If you’d like to buy the house of someone who never did pay up, your timing is excellent.
Marion County’s 2024 Online Tax Lien Sale takes place September 23–27. All bidders must cough up a $2,500 deposit, which grants them the opportunity to bid on properties in every township. But the auctions are not actually held at the property but conducted online, so bidders are strongly encouraged to thoroughly research a property before they make an offer. The minimum acceptable bid on any parcel must equal all taxes, penalties, and special assessments, plus administrative fees. All sales are final. No refunds.
If you relish endless, Kafkaesque battles with a faceless government entity, you can always challenge your assessment.
In Marion County, this process begins at the Marion County Assessor’s Office by (surprise!) filling out a form. Then the assessor calls you and tries to settle the matter congenially. If that doesn’t work, the call is followed by a face-to-face conference. If this still doesn’t square away your complaint, you’ll get a hearing, followed by an appeal to the Indiana Board of Tax Review, then Indiana Tax Court, and finally the Indiana Supreme Court. If you manage to persist through this entire process, you can expect a final resolution (not necessarily in your favor) sometime before the heat death of the universe. On the bright side, since 2023, a property owner’s tax can’t increase as a result of an appeal.
At the end of the day, homeowning in the Indianapolis area is still a relative bargain.
Maybe there’s a reason why Bruce Springsteen wrote so many bangers about leaving Jersey. The sky-high assessed values of homes in the suburbs of New York City, to name just one outpriced region of the country, not only make it harder to buy a home in the first place but generate sky-high property taxes. For example, the median sale price of a home—on which the all-important assessed value is based— in Morris County, New Jersey, about 30 miles west of Manhattan, is $649,947. Compare that to Hamilton County’s $417,884 and Marion County’s $240,131. So when you’re writing that next check to the County Treasurer’s Office, you may want to take a moment of silence for those folks living in average middleclass houses on 60-by-120-foot lots paying an eye-watering $12,000–$15,000 a year in property tax.
