Lawmakers weigh freezing property assessments after successful appeals

Indiana lawmakers are considering legislation that would freeze property tax assessments for four years when a property owner wins an assessment appeal.

House Bill 1166, authored by Rep. Ed Soliday, R-Valparaiso, would apply to residential, agricultural and commercial properties.

The Senate Tax and Fiscal Policy Committee on Tuesday discussed the bill, which says if a property assessment increases and the property owner wins an appeal at the county level or with the Indiana Board of Tax Review or any subsequent appeal, an assessor could not increase the assessed value of that property for four years unless something changes on that property, such as zoning, improvements or new use.

“When the court has spoken, they have spoken for four years unless there’s a change in use,” Soliday said.

Soliday said the legislation is aimed at protecting property owners who win appeals, because some assessors have essentially ignored those rulings and increased the assessments again shortly following the appeals.

“You’re just wasting money to go to court,” Soliday said.

He said the assessment should be frozen for four years because that’s the typical cycle for how often new assessments occur.

But some senators are concerned that the measure would treat property owners unfairly, because if two parcels are identical and adjacent, and only one property owner successfully appeals the assessment, then the taxes for that property would be locked in for four years, but taxes could increase for the other one.

“We’re trying to find a solution that’s going to work,” Sen. Travis Holdman, R-Markle, said. “But right now we’re just concerned about that issue.”

Sen. Tim Lanane, D-Anderson, said he’s also worried about big companies deciding to appeal all of their property assessments, because there’s at least a chance they could get their taxes frozen for four years.

Soliday said he didn’t think that would happen, though, and if it did, it shouldn’t clog the appeals system because some companies are already appealing assessments every year and the measure would prompt those appeals to transition to every four years.

“I think that’s subject to debate,” Lanane said. “The incentive is there now.”

Valparaiso-based C.L. Williams & Companies, the Indiana Apartment Association and the Indiana Farm Bureau all testified in support of the bill.

But Allen County Assessor Stacey O’Day said she believes the current appeals system is working and that most counties have an appeals rate of only 1%.

“We’re hitting our target 99% of the time,” O’Day said. “I think we’re hitting the market maybe more than we get credit for.”

Indiana Association of Counties Executive Director Dave Bottorff said he’s concerned about property values increasing even when nothing changes on a specific property. For example, if a restaurant opens next to a parking lot and then starts leasing that parking lot, the value for the parking lot parcel would increase even though the property use is the same and no improvements were made.

“There are other factors that can change the value of a parcel,” Bottorff said.

The Senate Tax and Fiscal Policy Committee did not vote on the bill. Holdman, chairman of the committee, said he wants to work on some of the issues raised during the hearing.

The bill passed the House 71-22 last month. The deadline for the committee to send the bill to the Senate floor is April 15.

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10 thoughts on “Lawmakers weigh freezing property assessments after successful appeals

  1. Under state law, assessments are required to be based on “fair market value.” Typically, this would mean that assessors use the actual sale prices of properties that are similar in size and condition sold in the same area within the prior twelve months and then adjust all such properties (not just that sold) to reflect a neighborhood’s evolving fair market value. And yes, it does mean that a property will see a raise in the assessment even when nothing may have changed on a specific property. Also, one would expect that a property that sold in any given year for X amount would, by state law, then be assessed at the sold price for at least the first year of its new assessment. But a review of assessments in Indianapolis show that is not the case. Why? That needs to be answered. As for Rep. Soliday’s legislation, as proposed it would clearly be inconsistent with existing state law. His proposal would deprive local governments of much needed revenue to maintain public services while very few would benefit from a freeze on their property tax bill. Given all this, IBJ should do an investigation into the process used to determine property assessments and give all of us a better understanding how tax assessing in Indianapolis and the collar counties actually works.

    1. It is comical TBH.

      I was annoyed my property taxes doubled 18 months after purchasing my home then realized I am still only being taxed at 75% of the purchase price vs assessed value…

    2. Comparative sales work well in a fairly homogenous market. In my downtown neighborhood, there are 4500sf Victorian mansions next to 2000sf bungalows. Plus for somebody that has owned for a long time, like one of my neighbor’s, who has been here 30+ years, I suspect his assessment is 50% too low.

      It seems that in Marion county, there is an automatic raise every year and I suspect the closest a tax assessor gets to a house is via an aerial photo.

      Plus if there are punitive assessor that immediately re-assess after a repeal and it is only a very small percentage of properties that appeal, this seems pretty revenue neutral.

      What I would like to see if big revenue not for profits, like hospitals, pay property taxes. In addition state government buildings pay no taxes. So much property in Marion county Center township is not taxed, it is crazy.

    3. Dan M., please note that assessments are supposed to compare sale prices of similar property in similar condition. This means mansions are a distinct sub-set and are not compared to bungalows. But what standards does the Marion County Assessor actually use? That needs to be explored and exposed. Also, non-profits and government entities are exempt from paying property taxes.

    1. With that myopic view, you would be okay with dilapidated schools, crumbing streets and roads, few police and fire personnel to protect your life and your property, and, in the end, a community where no one would want to raise a family or work in. Yep, that’s a helluva blueprint for the future.

    2. Are you the same crazy guy who posts insane fascist things in the North Vernon Gazette?

    3. Brent B, that already sounds like parts of Indy, plus many other places.

      James M, does reducing government involvement equal fascism?

      I like your comment Stanley J.

  2. Here’s a thought – why do we need assessors? just use market value when house was sold – the info is out there.

    then have a cola increase. also – once owner reaches 70 years old freeze the tax so nobody gets taxed out of their home.

    the fact they call hospitals non profit is laughable – they need to pony up. and so do churches for that matter.

    and Federal gov’t buildings – we can get some of our money back that other states are stealing from us.

    1. Dustin D.: Generally speaking I agree with your suggestions. I would freeze property taxes for homeowners over the age of 65, but only for properties assessed at less than the median price of a home in that market (could be township, city, or county). No need to give a free ride to those who own McMansions. Also, all states exempt churches, non-profits, and government entities from property taxes, so Indiana is not disadvantaged by doing so. But I agree churches and non-profits should pay property taxes, though perhaps at a discounted rate compared other property taxpayers.