No one likes to talk about property taxes, but it’s nice to know how to take advantage of any savings available to minimize your property tax bill if you are a homeowner. These savings are in the form of exemptions, or deductions, from the assessed value of your home.
Currently, many of us are taking advantage of the homestead exemption AND the mortgage exemption. A change is coming starting in 2023, though, but it will not affect the total exemption amount on your personal residence.
In March of this year, Governor Holcomb signed a law that repealed the $3,000 mortgage exemption in its entirety. HOWEVER…the current Homestead Exemption of $45,000 will increase by that same amount to $48,000, starting in January 2023, which will be payable in May 2024 and November 2024.
For Example:
Home’s Assessed Value: $250,000
New Homestead Exemption (whether mortgaged or not): $48,000 (original $45,000 plus $3,000 from former mortgage exemption)
Property Taxes Based On: $202,000
This change is actually great news for homeowners that don’t have a mortgage on their personal home, as they will be able to take advantage of the extra deduction with their exemption going from $45,000 to $48,000. Filing for the Homestead Exemption will continue to be handled at the closing table. In the past, Mortgage Exemption filings had to be done by the homeowner through the county assessor’s office after closing on a new personal residence or after refinancing a current mortgage. That will no longer be necessary.
What if my home is assessed at less than $80,000?
The only exception to this law is if you happen to have a personal home that is assessed at $79,999 or less. Those exemptions will be calculated at 60% of the assessed value, which means you would only pay property taxes on 40% of the assessment.
For Example:
Home’s Assessed Value: $60,000
Homestead Exemption: $36,000 (60% of $60,000)
Property Taxes Based On: $24,000
What if I’ve already closed on a home, or will be yet in 2022?
The change in exemptions goes into effect starting January 2023. If you’ve already applied for the $3,000 mortgage deduction, you don’t need to do anything. Your exemptions will still be the $45,000 Homestead and $3,000 Mortgage. Starting in 2023, those two exemptions will be combined as a homestead at $48,000.
If you haven’t yet applied for the mortgage exemption and have a mortgage on your personal residence, go ahead and do that through your county office for this year to reduce your 2023 bill.
If you’re planning to close on a new home that will be your personal residence and you will have a mortgage, be sure to apply for the mortgage exemption before the end of the year.
Any other exemptions applicable to Indiana will remain the same (i.e., Supplemental, Disabled Veterans, Over 65, etc.). For questions regarding property taxes or regarding this change, you can always talk to an F.C. Tucker Emge REALTOR® or the assessor’s office for your county:
- Vanderburgh County
- Warrick County
- Spencer County
- Posey County
- Gibson County
- Dubois County
- Knox County
- Perry County
For all of the latest information on our local real estate market in Southwestern Indiana, you can always trust the professionals at F.C. Tucker Emge. Our agents have superior training and resources at their disposal so they can better educate you about the road to homeownership. Even if you are 6-12 months (or more!) out from making a change, there is a lot to learn about the home buying and selling process, and our agents can help you learn what you need to know so that you can be confident in your decision and have a smooth experience when the time comes. Let’s Talk!
