The new age in Indiana property tax assessment.

• Author: Rogers, Carol O.

Property assessment is the process of placing a value on property. Pretty simple process, right?

Two types of property are taxed in Indiana: real and personal. Real property consists of land, buildings, and other major permanent structures. Personal property is almost exclusively that of businesses and includes equipment for farming, manufacturing, and product inventories.

The assessment of personal property is conducted every year, while real property assessment is performed less frequently (before 2002, the last real property assessment was conducted in 1995). Normally, assessments are conducted by elected township assessors and by an elected county assessor (except in Lake County, where the 2002 assessment for most properties was conducted by a private company).

The full value determined for a property is called the gross assessed value (GAV). But in most cases this is not the value taxed, since most properties qualify for exemptions or deductions that will reduce taxable value. The most common deduction is the homestead deduction for owner-occupied residences. Other common exemptions and deductions include those for disabled veterans, government property, and depressed economic areas. The assessed value after all exemptions and deductions are subtracted is called the net assessed value (NAV).

Units and Districts

Taxing units--entities such as townships, municipalities, school districts, sanitary districts, libraries, and the like--have the authority to receive taxes on real estate within the area they serve. The boundaries of these taxing units overlap and, in overlapping, they form taxing districts. In other words, a taxing district is a geographical area in which all of the properties are taxed by the same set of taxing units. Depending on where the parcel is located (geography is very important), a home or business will pay taxes toward a school district, library district, city or town, and township.

The property tax bill for a given parcel lists each taxing unit to which its property taxes are allocated. In addition, a portion of the property taxes goes to the individual county (for parks and recreation, welfare, and other county funds) and a portion goes to the State of Indiana.

Determining the Levy

Each taxing unit creates a budget and a revenue estimate for the coming year. This and other financial information is submitted to the Indiana Department of Local Government Finance (DLGF) for certification (and is called a certified...