The local officials will spread the property tax increase amongst the working families and retired seniors of lower valued homes. How will this take place? A home owned by a senior citizen, that is valued at $40,000 will see an increase in their property value. Although homes may not be selling in these neighborhood, the increase is needed to offset the homestead deduction for homeowners. The homestead deduction is a tax break provided by the State of Indiana to homeowners. The deduction can be as much as $45,000 depending of the value of the home. After the deduction, local officials calculates the property tax.
However to maximize the amount of property tax collected, local officials will artificially increase the home values by taking into account the homestead deduction. By artificially increasing the value of the home, it recaptures the deduction given to the homeowners from the State of Indiana. With this manipulating of the numbers, local official will tout that there was a increase in the homestead deduction bu tin fact reduced the deduction provided by the homestead deduction. So a home valued at $40,000 reduced by a homestead deduction to $20,000 taxable value will see their home value artificially raised above the $40,000 Why, you say? The answer from IDLFG: Read more click here.
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