Property Deductions

At closing, when you are a buyer you get a (usually) bright yellow or pink sheet of paper that tells you, hey in 30 days you need to file the deductions on your property. This helps to lower your tax bill on your property.

The most common exemptions filed are the homestead deduction and mortgage deduction. Seniors also have a senior exemption too that many file. That said, there are many deductions that you can file for if you qualify. CLICK HERE to see if you qualify for any more.

Now, let’s specifically talk about the homestead deduction and the mortgage deduction. Walking into 2023, there was a change to the ability to file a mortgage deduction on a property in the state of Indiana. Specifically stated from the state of Indiana, “This means that beginning January 1, 2023, individuals will no longer be able to apply for this property tax deduction, and county auditors will no longer apply the mortgage deduction to property tax bills beginning with the 2023 Pay 2024 cycle.” We pay taxes in rears, so the taxes that we are currently paying are for the property in 2022. Our 2023 taxes will be paid in 2024, so the mortgage deduction was removed as of January 1st.

Now, it’s not all bad news, while the mortgage deduction was taken away, when you take a further look, it’s not all bad news. The current homestead deduction is sixty percent (60%) of the assessed value of the real property, mobile home not assessed as real property, or manufactured home not assessed as real property OR $45,000. This will change on the 2024 tax bill and the amount will increase to $48,000. This also means that for those who bought a home with cash will also now get the $48,000 amount as well.

So while it is being taken from one area (the mortgage deduction), it is being increased by $3,000 in the homestead deduction.

Here is the article from the State of Indiana to learn more about the changes.

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