Did you buy a home or refinance your mortgage this year? If you did, remember to file your property tax exemptions by the end of the year! If exemptions aren’t filed, your taxes (and monthly house payment if you escrow property taxes) could go up substantially.
During closing, there are a lot of papers flying around. Arguably, one of the most important is a state-required, bright yellow form and is given to explain the benefits of property tax exemptions.
Exemptions at a glance
There are two main property tax exemptions that most homeowners will qualify for; Homestead & Mortgage. The homestead exemption simply means you are living in the home as your primary residence and it is not a rental house, vacation house, etc. This is the most valuable deduction and can save you up to 50% on your property tax bill. The homestead deduction is now filed for you at closing through the sales disclosure, but this is a great time to verify with the county that it is indeed recorded.
With a homestead deduction, your primary residence property taxes will be capped at 1% of the assessed value per year.
Without a homestead deduction (rental property, etc.), your residential property will be capped at 2% of the assessed value per year.
Out buildings and other structures are taxed at 3% of the assessed value per year.
The second common deduction is the mortgage exemption. As the name states, this deduction is available to homeowners who have a mortgage attached to their property. This form is NOT filed for you at closing and must be filed by you, before December 31st in order for the deduction to be in effect for the following year’s property taxes.
Exemptions do not need to be re-filed each year. Once they’re in place, you’re all set. However, if refinance your home, you MUST re-file your mortgage exemption. If you change the name on title (i.e. add or remove someone from title, change the last name of someone on title, etc.), it will also need to be re-filed.
How to file
A few counties allow you to file your exemptions online. I’ve provided direct links to those, as well as all Central Indiana Auditor’s office websites and info in the link below.
When filing your mortgage exemption in person, be sure to bring your drivers’ license and have an approximate amount of the balance owed on your loan. Also make sure that it has been at least 30-days since closing. Your deed will need to be recorded and a good rule of thumb is to wait until after you make your first payment at minimum. If you closed in the month of December, its a good idea to go to the auditors office in person as close to the end of the year as you can and file. Either way, be sure to get and keep the receipt! This is your only proof that you have filed these exemptions.
If there are two people on title (i.e. husband and wife), only one person needs to sign and file.
In addition to the homestead and mortgage exemptions, here are a few more deductions you may qualify for:
Over 65 – If you are over 65 and have a combined adjusted gross income of $25,000 or less
Disabled – If you are blind or disabled and have an individual taxable gross income of $17,000 or less
Disabled Veteran – You have served in U.S. Military and are disabled
Green exemptions – There are additional deductions for homes utilizing solar, wind, hydroelectric and geothermal energy systems.
If you’re not sure about exemptions, call your county auditor’s office or leave me a comment below and I’ll be happy to take a look for you. For specific questions, feel free to call me at 317-698-2311.