Indiana Real Estate Taxes Update

Property tax reform is coming in Indiana, one way or another, good or bad, it is coming.  This is THE top issue on everybody’s mind and agenda right now, however the details of the tax reform are getting sticky. 

Governor Mitch Daniels has proposed his “1-2-3 plan” which limits property taxes to 1% of the assessed value for residential, 2% for rentals, and 3% for commercial.  I think everyone agrees that this is good starting off point, but many disagree about the details of the tax reform.  In addition, in order to pay for this tax reform the governor is proposing a 1% sales tax increase.

The 1% sales tax increase could prove to be a very hard measure to pass for Indiana lawmakers.  The speaker of the house has already said that it not be easy to the lawmakers to raise the sales tax, even to help homeowners.  Factor in that next year is an election year and it gets even more complicated. 

Despite the concerns about elections and raising taxes, I am confident that our lawmakers will act quickly and offer homeowners some sort of tax relief.  There is no way they cannot; there is simply too much pressure from the public to ignore this issue.

Whatever the outcome is, this will have a great impact on Indianapolis real estate and the economy as a whole.  I think we have seen in the news lately that real estate is a vital part of the economy and this tax reform is a critical step to insure we do not stifle the real estate economy with overbearing taxes. 

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