Property Tax Deductions for property owners

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Property Tax Deductions for Homeowners and the Elderly

A Homeowner or an Individual over the age of sixty five is eligible for certain deductions in the assessed value of his or her real property based on meeting the qualifications found in the Indiana Code, and as described in this brochure. All deduction applications are filed on or before May 10 of the assessment year, with the county auditor where the property is located.

Deductions for Individuals Over the Age of 65 (I C 6 -1.1 -1 2 -9)

An individual sixty five years of age on or before 12/31 of the calendar year preceding the year the deduction is claimed, is eligible for a deduction of $2,000 from the assessed value of real property on which he or she currently resides if they meet the following qualifications:

1. The combined adjusted gross income of the individual and his or her spouse or other persons with whom the property is being shared or purchased did not exceed $25,000 for the preceding calendar year;
2. The individual has owned the property for at least one year;
3. The assessed value of the real property did not exceed $23,000 and
4. The individual receives no other property tax deduction for the same year the individual applies for this deduction, with the exception of the mortgage and standard deductions, or a deduction for improvements made to comply with fertilizer and pesticide storage rules for qualified facilities.

Mobile home owners may also qualify for the age sixty five deduction in the amount of the lesser of one half (1/2) of the assessed value of the mobile home or $2,000. Mobile home owners must meet the four qualifications listed above for real property owners.

This deduction is also available to surviving spouses of deceased individuals who were at least sixty-five years old at the time of death if the surviving spouse is at least sixty years of age on or before 12/31 of the year preceding the year being claimed, and has not remarried. Only one age 65 deduction per piece of real property or mobile home is allowed.

Homestead Credit and Standard Deduction (IC 6-1.1-20.9; IC 6-1.1-12-37)

A homestead is:

• a person's primary place of residence and not a secondary home such as a vacation home:
• a residence a person either pays the property tax for or a residence a person is buying under a contract that states he or she will pay the property taxes for; and
• a dwelling and the land (not exceeding one acre) that surrounds it.

A person regardless of age who either owns or is buying a homestead is entitled to a credit against his or her property taxes. The amount of the credit is determined by multiplying the homestead percentage of credit (1998 through 2001 10%, 2002 and thereafter 4%) by the amount a person owes in property taxes on the homestead portion of their property tax bill. In addition, a person who qualifies for a homestead credit also receives a standard deduction of one-half (1/2) of the assessed value of the real property or $2,000, whichever is less. The deduction is subtracted from the homestead assessed value before the taxes are calculated.

Mortgage Deductions (IC 6-1.1-12-1)

A person who has a mortgage may also receive a deduction. Any person regardless of age qualifies for a deduction from:

• the assessed value of mortgaged real property he or she owns; or
• the assessed value of mortgaged real property he or she is buying under a contract that states he or she will pay the property taxes on the real property.

The amount of the deduction from an assessed value a person may receive is the balance of the mortgage or contract indebtedness on the assessment date of that year, one-half (1/2) of the assessed value of the real property, or $1,000, whichever is the lesser amount.