Note: This message is displayed if (1) your browser is not standards-compliant or (2) you have you disabled CSS. Read our Policies for more information.
For Immediate Release
INDIANAPOLIS (Mar. 12, 2008) – Indiana farmers will see an increase in their property tax assessments for the March 1, 2007 assessment date due to new calculations made by the Department of Local Government Finance.
Lower interest rates, higher yields and increased product prices drove the market value-based agricultural land assessment statewide from its previous value of $880/acre for the March 1, 2006 assessment date to $1,140/acre for the March 1, 2007 assessment date.
Indiana law requires the Department to use a 6-year rolling average of the market value in use of agricultural land in the state to calculate the assessed value.
"The new assessed value reflects the changes in the market from 1999 to 2004," said Melissa K. Henson, commissioner of the Department of Local Government Finance. "Interest rates dropped more than 2 percent, corn and soybean yields increased and prices for both corn and soybeans increased in the six-year period."
The Department calculates market value in use of agricultural land statewide by first subtracting variable and fixed costs from the gross income received from the sale of crops. This figure is then divided by a capitalization rate, which reflects the required returns on capital and accounts for associated risks.
"Farmers will continue to benefit from the application of productivity factors beyond this $1,140/acre assessment," said Barry Wood, the Department's assessment director. "Township and county assessors will still work with farmers to apply factors that may discount land value for poor soil conditions, adverse topography or varying uses that may not be reflected in the state's base assessment of $1,140."
The new assessment does not change the state's certified land program or any other state or federal program, Wood said.
The increase in the assessed value for agricultural land comes on the heels of the state's first annual adjustment of property tax assessments for residential, commercial and industrial property. Assessors across the state adjusted the assessed values of residential, commercial and industrial property by comparing 2004 and 2005 sales data in their area with the 2002 assessed values. Since the 2002 assessed value was based on a 1999 market value, many property owners in the state saw an increase in their assessed value, leaving many concerned over a potential increase in their property taxes in 2007.
"An increase in the assessed value of any property type does not necessarily equate to an increase in property taxes," Henson said. "Taxpayers could see an increase or a decrease in their tax bills based on their location and the expenditures by local government."
For more information on the new agricultural assessed values, contact the Department's public information officer, at (317) 233-9222.
2007 News Releases (View)