I’m going to try and explain what is going on with property taxes, and how you have to be careful buying a home in the first half(or longer) of this year. I’ll preface this with the thought that it’s so confusing, I might crisscross some terms as I try to write it all out… So what I am listing below is more of my current understanding and deemed reliable, but not guaranteed..(Take that you litigious types!)
Indiana is SOoooo confusing on property taxes.. We pay 1 year in arears. Supposedly we pay in May and November for the previous year. So theoretically the May 2008 bill is paying for January-June 2007, and November 2008 is paying for July – December of 2007. However with things so screwed up lately. we prolly won’t pay that may 08 bill(for 1st half of 07), until august or september 08.
It gets really nasty when you try to buy/sell a home, because a lot of real estate transaction have the seller paying for their taxes, and the buyer paying for his.. So generally, at closing, the buyer is issued a credit for the taxes of the seller. e.g.- the buyer, at some point, is going to have to pay for the sellers taxes and it could be a few months after closing. Take heart though, because you will get to do incur the same nightmare to the next buyer.
The REAL issue comes in currently when the property taxes are in flux, like right now. Lets quote an article found at indygov.org
(QUOTE)
Reconciliation Statement for Property Taxes due in 2007: Under the governor’s reassessment order, property tax payers were instructed to pay the same amount of property taxes in 2007 as they paid in 2006 and that a final bill would be used to collect remaining taxes once the reassessment was completed in 2008. The reconciling property tax statement, which is the final tax statement for taxes due in 2007, will be mailed in June and due in July 2008. That reassessment has been completed and the state approved the values in late March, 2008. Based on the reassessed values, new tax rates will be determined and then multiplied by the assessed value to determine taxes due. Assessed values will be available on the County Assessor’s webpage http://www.indygov.org/eGov/County/Assessors/County/home.htm and a link to that page will also be posted on this website.
(/QUOTE)
Needless to say, if you are buying a home this year, you need to make sure you are covering all your bases on reconciliation bills that may be heading your way.. Either get your Realtor to figure out possible worst case numbers and figure that into your offer, and or check with the title company to see how they are handling the situation. Some title companies are making buyers sign a form that basically says the Realtors and Title company can not be held responsible if the numbers they credited you at closing are off, and you(the buyer) owe more than you were given credit for. Really, the assessor’s office hasnt released the final reconciliation bills yet, so there isnt a tried and true way to figure out the final numbers, but the title companies are by-enlarge only using the tax numbers from 2005, in which case you need to make sure that if you are charged the revoked tax bill numbers, you are credited for them..
Wow, does that make sense? Prolly not, so lets do an in-conclusion..
1) Get with your Realtor to look up the Worst-case scenario numbers that could possibly be hitting you, and figure that into the price you offer, or get ready to get billed for it… possibly…
2) Check with your closing company to see if they are, or did charge the seller for the worst-case scenario numbers.
If you are a seller, get prepared to get billed for possible reconciliation fees. Most Realtors aren’t paying attention though, so you are prolly fine… Imagine how ticked the buyers are going to be though..
Phew… hope some of that make sense… It’s a nightmare, and even I get lost in the convoluted mess…
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