If you a Hoosier you already know this unless you have been living under a rock, but the lovely Indiana lawmakers have finally passed some meaningful property tax reform. What they have is essentially what they have been talking about the entire time with Mitch Daniel’s 3-2-1 proposal. Here are the major changes taking place:
- This year property taxes will be reduced by an average of 30% due to increased homestead exemptions.
- Next year the property taxes will be capped at 1.5% of the assessed value
- In 2010 and after taxes will be capped at 1% of the assessed value
- Rentals and Farms are capped at 2% and businesses are capped at 3%
Of course they have to make up that money somewhere else so the state sales tax will be increased from 6% to 7% starting April 1st. In addition, local income taxes will most likely be increased to make up some of the lost money. This new legislation is also aimed at curbing government spending which could be a good thing if it used as means to make things more efficient.
This new tax reform comes on the heals of FHA increasing the loan limits for Indianapolis homes and right in time for spring and summer selling season for real estate. I hope with this finally being resolved the Indianapolis real estate market will get back on track and on the road to recovery.
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Date: 2008-03-19 11:54:35Views: 327
Comments
Mike Taylor
Ki - The sales tax increase does sit well with me either, but I would rather have that than stifle the real estate market because of outrageous property taxes.
Ki Gray
That sounds like good news. I can't imagine that not being a positive factor for the real estate market.
The only part I dont like is increasing sales taxes. I am not a fan of high sales taxes. In addition to being a regressive tax I think it can slow down commerce.