Monday, September 9, 2013

Journal & Courier Reports Many Risk Losing Homestead Deduction in Tippecanoe County

From the Lafayette Journal & Courier:

People scream when property taxes increase. But imagine how thousands of Tippecanoe County property owners will howl next spring if their property tax bills double due to their own oversight?

That’s what could happen to up to 5,600 property owners who haven’t yet fully completed a Homestead Verification Form and filed it with the county auditor’s office. On Friday, the auditor’s office released a list of those owners. A month from now, if owners still haven’t provided the information to the auditor, they’ll receive a letter informing them they will lose their homestead deduction.

“It’s not a ‘naughty list.’ I didn’t want to embarrass anybody,” Tippecanoe County Auditor Jennifer Weston said. “We’re still in the data collection phase and have identified these (5,600) that we don’t have data for — for whatever reason.”

The state allows property owners to claim one residence for the homestead deductions. Vacation homes and rentals, for example, do not qualify for the homestead credit since they are not the owner’s primary residence.

The standard homestead deduction takes $45,000 off the property’s assessed value for tax purposes. After the standard homestead deduction, a supplemental homestead deduction takes an additional 35 percent off the adjusted assessed value, Weston said.

“The impact to the taxpayers is that it nearly doubles it (the tax liability), as a rule of thumb,” Weston said.

Making sure that everyone who claims a homestead deduction deserves it is a big deal to the county. If everyone on the list were to lose the deduction, the county’s total assessed value would go up 7 percent, and everyone’s tax rate would drop approximately 2 cents.

That’s unlikely, because many people on the list simply have not filled out the form that says they in fact live in the residence in question.

In the past, once a property owner claimed a homestead deduction, it stayed year after year without further action. Starting in 2010, Hoosier taxpayers began receiving pink homestead verification forms and return envelopes with their property tax bills.

See the full article here: