How Are Property Taxes Paid in Arrears in Indiana?

Property taxes in Indiana are paid in arrears, which means the taxes you pay this year cover the taxes owed for last year. Property taxes in Indiana cover local and county taxes as well as state taxes on real estate.

Indiana property taxes are paid to the Department of Local Government Finance. In Indiana, property taxes are due twice a year, which is on May 10th and November 10th. Since the taxes are in arrears, you owe the total annual taxes due for the previous year, but rather than pay it in one lump sum, you have the option to pay 50 percent in May and the remaining 50 percent in November.

The county tax assessor conducts an assessment study to the Department of Local Government Finance. This study reveals to the department what is happening with local property values–whether values are going up, going down and holding steady. Once the Department of Local Government Finance reviews and approves the study, the county assessor is then responsible for submitting the gross assessed values for each property to the county auditor. The county auditor then adjusts the gross assessed value for deductions. The net assessed value is the value used to determine the amount of property taxes due on the property. Assessed value are completed on March 1 of each year.

The tax rate is also recalculated on an annual basis to make sure that the taxes cover the local costs and expenses. To determine the tax rate, the county first estimates how much money is required for projected projects for the county for the year, which is set by the Department of Local Government Finance. The total amount of money is then divided by the net assessed value of the properties to determine the tax rate.

If you are escrowing for your taxes with your mortgage payment, then the tax bill for last year’s taxes is sent to your mortgage company. The mortgage company is responsible for paying your property taxes on time each May and November. Even if your mortgage company receives your tax bill, you also receive a copy of the bill for your records. If you do not escrow for taxes with your mortgage payment, then you will receive the tax bill directly and are responsible for making the two payments of taxes in arrears.

The new tax bill law that was passed in 2008 requires that each county use the same format for its property tax bill. Remember, since Indiana property taxes are paid in arrears, the tax bill for 2008 is paid is 2009 and the tax bill for 2009 is paid in 2010, and so forth and so on.