Indiana Property taxes

[Geo-TH,In]

1%, 2%, 3% of assessed value.

I'm still researching building a man cave. Yesterday I went to court house annex and talked to area planning, county building inspector and county assessor .

The taxes on my house and up to one acre is 1% of assessed value. The assessed value is determined by a formula, age, type of construction and location.

I have a 3/4 acre empty lot adjacent to my house up north. It's taxed at 2% of assessed value. To build a garage on that lot I had to add it to my house property which was built on a 1/2 acre lot. So a half acre will be only taxes at 1%, good news. The 1/4 acre of lot is called, overage acreage. It will be taxed at old rate 2%.

Now for the bad news. I have a 2 car attached garage and a detached garage on my 1/2 acre lot which is taxed at 1%. If I build another detached garage it will be taxed at 3%. The taxes on a 1600 square foot stick built garage will be $1000 a year. If I build a post beam garage taxes will be $700. A post garage is a pole barn with overhead doors. Assessor said post beam garage is cheaper than a pole barn with sliding doors.

After talking to assessor, I've decided to built a post beam garage.

BTW, if you buy a property, your assessed value is the price you paid for property.

All commercial property is 3%. If you own a second property, 2%. I was told if your land is growing corps, taxes are less? Not sure how it's assessed or tax rate.

A guy buys a large building in county at the south edge of city. It was a furniture store. He had many hoops to jump through to build an indoor shooting range and sell guns. This year his property taxes on just the land increased 10 times, from $100k to $1 Million. OUCH! 3% commercial property. Need to sell a lot of guns to pay those taxes.

 

[dr sportster]

The assessed value is what the tax accessor says it is not what you paid for the house .{although NJ stautes said it should be based on selling price -- not so] My house in NJ was accessed at 675 and I was taxed on that . In reality when I moved house sold for 410. I did put in appeals and won due to being in an envoirmental sensitive zone but was not adjusted. I moved there for 270.

 

[RobCons]

So if I your property is valued at $100,000 the taxes are $1,000 or higher? Thats about 3 times what ours are.

 

[ss55]

Can you build the new shed on the same 1/2 acre lot as your house and other sheds?

Some jurisdictions require a minimum percentage of the area of all lots must be able to absorb rain water to avoid overloading aging storm sewers. The percentage varies by proximity to troubled waterways and the storm sewer capacity. Some property owners install permeable driveways to meet the requirements and still get their new shed.

 

[tim s]

Have you given shipping containers a thought?? Some county's treat a shed that is "Portable" differently,you may even set it up to be 'Leasing' them from a family member,or your self,,,I just bought a nice 40ft Hi Cube to keep my 60's in, I call it my "Toy Box", it's 9 1/2ft inside 2 or three of these together could make a nice spot..

 

[D beatty]

I live in northern Indiana and you would be taxed for that container. They tax people for those little storage sheds you put behind house.

 

[Geo-TH,In]

I have many storage sheds, smallest is 8x8. Assessed value $1000 each.

 

[tim s]

Ooh my,,,you should think about a different location,,Darn it. The county North of me got very expensive to live it,,I know of a few that sold out and moved... The Farms in my county, Perry in Ohio, average $55 per acre. I use to cry about that,, but after reading your post my Tears are drying up ;^)

 

[Geo-TH,In]

Many factors to include in tax rates, homestead exemption, your age, mortgage
exemption, even your income may be factored in. I went to county site and
googled my taxes.
Detail:
2017 Pay 2018 Property Tax Detail Tax 1st Installment Tax$764.08
2017 Pay 2018 Property Tax Detail Tax 2nd Installment Tax$764.08

So my man cave will cost me about what I pay for 6 months of taxes on for a
house, .58 acres land and detached garage. Assessed value after deductions
$152,000.

My house is 2000+ ft, 1000 ft basement, 2 car attached, detached garage,
brick. Something doesn't seem right here.

That doesn't seem right that a Post beam garage, est cost for someone to
build post beam garage $20k without concrete floor, will jack my taxes that
much ouch!!

 

[TomIn]

As complicated as you have made the Indiana real estate tax system seem-----it is really even more complex than you describe.

The 1%, 2%, and 3% rates you mention are CAP rates (and that assumes that voters have not approved referendums for even higher rates.) In Vigo County, the actual rates vary from slightly less than 2% to well over 4%. These rates apply to the assessed value LESS any allowable deductions (Such as homestead deductions, mortgage deductions, old age low income deductions, disabled veteran deductions, etc.) Your tax bill is calculated by multiplying the actual rate times the net (net of deductions) assessed value. Then the cap rate(s) are multiplied by the gross assessed values. You pay whichever amount is less.

The various actual tax rates can be found on http://www.stats.indiana.edu/dms4/propertytaxes.asp

The law allows you only one garage to be taxed under the lowest rate cap (The residential rate cap is 1% for your primary residence. All other residences have a 2% cap rate.) The assessor should allow the highest assessed value garage to be classified as the "primary" (lowest tax rate) garage.

Agricultural land has a 2% cap rate and is assessed based on soil type. The "base" value is about $1800 per acre for tillable land in 2018.

One additional tax advantage for a pole barn construction is that pole barns are depreciated faster than stick construction, so the assessed value will even lower in future years. As senior citizens, we may not live long enough to enjoy this advantage.

 

[Geo-TH,In]

If you look at my post below, after deductions my house, 2 sheds, detached garage and .58 acres is valued at $152,000 and my taxes are 1% of that. Original house was built in 1942. I doubled its size, bricked it, added a 2 car garage starting in 1991 finished in 1996. Back then, the date of construction for adding on went back to 1942. So my house is old. Now room additions assessments are date of construction.

I didn't realize Indiana's taxes are so complicated.

I think all me rental properties are taxes at 2%. I'll take a closer look to make sure. I know they doubled after Indiana went to the 1,2,3%

 

[Dave H (MI)]

What happens if you put an addition on an existing building? Can you do that and will it help?

 

[Geo-TH,In]

Problem is space for adding on new building. I'm going to research all options.
The man who built my house also built the detached garage. Then his daughter got married and took over the house. So he added on to the garage and made a bachelor pad on the back of garage. Its a 4 room house, one bedroom, large bath, kitchen/dining and living room. I added on a laundry room taking some space in garage.

My original house, 2 bedroom one bath, 1000 ft with basement was built in 1942. A one car garage was added on the east side. Part of that was on neighbors property. So before I bought this place in 1977, neighbor sold 10 ft of property. So my half acre is actually .58 acres. Then in 1991 I did a total remodel making house over 2000 ft with 2 car attached garage, a master bedroom and bath. 25000 brick. New everything from windows, doors, plumbing, electrical, Kitchen. Spent 2x on remodel than I paid for house in 1977. I did 90% of the work myself.

No ideal place to put on an addition.
If my detached garage would burn down or a tornado leveled it, I couldn't rebuild it. Area planning has zoned my property R1, residential one. The second house is currently grandfathered in so they can't make me take it down.

If that place were gone, then my problem would be over along with a nice little income form a one bedroom house, $475/mo.

 

[Geo-TH,In]

My son just bought a new house in Plainfield, $360,000. His taxes are 1% of price he paid for it.

 

[Traditional Farmer]

I pay $0.72 cents per $100 of accessed value on the houses and 2 acres with them,the farm land is much cheaper with land use taxes.Total tax bill on two houses and just under 200 acres
is around $2600.Thats the county I live in,down in Buckingham Co I have a 30 X 40 stick built shop on 10 acres taxes are less than $100 a year the other two counties I have places are in between those 2.
I have some carports for storage and animal shelters they aren't taxed at all considered portable buildings.

 

[Geo-TH,In]

I'm glad I visited the county auditor before I built. I feel like I would be getting shafted on taxes for new construction.

 

[TomIn]

It looks like you have a nice place!

To see how the exemptions work and how the tax is calculated you can look at the state's "Tax Bill Calculator" website:

https://gateway.ifionline.org/CalculatorsDLGF/TaxCalculator.aspx

The fact that you are paying very close to 1% of your NET assessed value is purely a coincidence. The 1% property tax cap is based on GROSS assessed value (not NET assessed value.)

Of all the available deductions, the Homestead and supplemental homestead deductions are the two the matter the most. The homestead deduction allows you to deduct 60% of the assessed value---up to a maximum of $45,000. The supplemental deduction allows you to deduct 35% of the remaining (after the homestead deduction is subtracted) value under $600,000 and 25% of the amount over $600,000. This can be a substantial amount of money.

The mortgage deduction is the balance of your mortgage WITH A MAXIMUM OF $3000. The over 65 deduction is only available if the assessed value is under $182,430 AND your adjusted gross income is under $25,000. The dollar amount of this deduction is relatively small (when compared to the homestead deductions.)

The added tax for a second garage is high, but it is what the legislature specified. The thought was that taxes should be low for necessities and higher for luxuries. Having multiple garages is apparently a luxury while having a single ten car garage is not.

 

[Spook]

Selling guns is not real expensive to set up for. A friend of mine wanted to buy out a old sporting goods store, and turn it into a indoor shooting range. He said the cost of the ventilation system was more than what he was going to pay for the building. I guess when you shoot, a little bit of lead gets airborne?

 

[Geo-TH,In]

Before I buy a 10x40 shipping container at $3-4000, I'll check with building inspector and auditor into making the largest shed possible on skids with an overhead door on end. I'll make shed on skids. At some point the skids will come off and shed will be bolted to a slab.

 

[Stephen Newell]

Where I'm at taxes on my property run closer to 1.75%.

 

[TomIn]

George,

Just to aid your thought process, this is a link to the assessor's manual cost schedules that should be used in assessing residential and farm buildings. The section for garages is on Schedule G1 (page 10). Barns and machine sheds are Schedule G2 (pages 15 & 16)

https://www.in.gov/dlgf/files/180130%20-%20Appendix_C_2018_Final%20-%20Errata.pdf

The files refers to pole construction and frame construction. They do not mention "post beam" construction or whether the buildings have overhead or sliding doors. The schedule for garages does not list cost adjustments for different heights buildings or insulating and finishing the interior. The schedule for barns and machine sheds shows how different heights, insulation, and interior finishing should affect the costs.

 

[Texasmark1]

1.75% for me too; school the biggie, and good deducts for homestead, farm land (ag. exemption), age, and old dwellings. Appraisers are benevolent. Happy with my taxes and with the deducts, very, very, reasonable. Then there is 8.25% (6 state 2.5 local) sales tax and ag exemption on farm related purchases....like most everything but gloves and a few other personal items at HF are tax free, no state income tax, and if you don't earn much over your SS check, no federal income taxes either.

 

[Geo-TH,In]

County auditor didn't ask anything about height, insulation, finished interior, floor. Only wanted to know where it going, square footage and type of construction. For some reason I go from 1% to 3%. Stick built value $31,700 = $951. Pole barn $25,400 = $762. Post beam garage $23,500 = $705.

I pay $752 each installment for everything. It's nuts a stick built structure will be more than one installment. A post beam garage slightly less.

 

[Geo-TH,In]

Tom,
I went to the website and came up with numbers close to what auditor came up with. I could live with 1%. They want to tax me at 3%, why? 3% is commercial rates. This building isn't for commercial use. I won't build this if I have to pay 3%.

 

[Mike M]

Maybe since it not your main residence and a rental ? it is considered commercial ?

 

[Donald Lehman]

ha! you should come to NY. (NOT!)

 

[ss55]

George,
Have you looked into all the costs for this building, i.e. the DIRTI five: Depreciation, Interest, Repairs, Taxes and Insurance? You have covered the taxes pretty well, but not the other four. Out buildings on a building lot often become white elephants that most people won't pay much extra for. If in 15 years you only get an extra $10,000 for a building that cost you $25,000, that $1000 per year depreciation will be more than the taxes. Three percent interest on the same $25,000 building will be $750 per year, the same as the taxes. Add in insurance and repairs and your annual costs for this shed will likely be over $2500 per year.

If this shed will only be used for storage, many people look into alternatives like renting storage space or thinning the herd enough that the extra shed will not be needed. If it will also be a shop, can you replace one or more existing buildings with this new shed and locate it on the same lot as your house?

Good luck.

 

[TomIn]

I can understand most everyone (including me) not liking to pay property taxes. Unfortunately, as long as the government (mostly schools in Indiana) continue to spend large sums of money, somebody has to pay the tab. The Indiana legislature recognized that high taxes rates for voters was very unpopular, so they decided to reduce the property tax burden for certain groups through the use of deductions, credits, and rate caps.

The most protected "class" of property is the taxpayers principal residence with may include up to one acre of land, a "home" (which can be a house, trailer, or just about anything else where a person chooses to live), and a garage. This is commonly referred to as residential property, but the tax protection extends only to the first acre of land, one "home" and one garage. Additional homes, garages, man caves, swimming pools, tennis courts, stables, ice rinks, etc. are not afforded the lower rates even if they are located on the same parcel as the owners principal residence.

If your goal is to minimize the percentage of assessed value that you pay in taxes, you can move to a taxing district that has lower tax rates or find a way to live with a single house and single garage. Neither option seems like what you want, but we don't always get what we want.

 

[Geo-TH,In]

No, not a rental. I added an empty 3/4 acre lot to my residence up north that I bought in 1977. If it a rental, I would be paying 2%. I did the math, I only pay 1% on property valued at $152,000 after my homestead and mortgage exemption. I paid my house off 20 years ago. To get a mortgage exemption I took out a home equity line of credit. I have never used my HELOC and still get an exemption.

I'll try to figure out a way around paying 3% on man cave or it won't be built. I wanted to combine items I have in 2 one car garages and 2 two car garages.

Now if I want to use my workshop, 24x24 , I have to move a tractor outside to have room to work. Workshop is both a metal and wood shop. I need, actually want, more room.

 

[D beatty]

They do here in northern Indiana. you pay more if building has Electric and concrete floor. They charge more on a house with fireplace over wood stove. They tried charging me for fire place because of the size of chimney.