The Local Government glossary below provides definitions for key terms used throughout this division and corresponding documents to help clarify technical language and ensure a shared understanding of concepts and terms.
Annually Adjusting Property Values - The annual adjustments are calculated by comparing the prior year assessment with current sales data from a neighborhood. The difference, positive or negative, will be used to create a factor that assessing officials will apply to the property’s assessed value to bring it to current market value-in-use.
Appraisal - A supportable estimate of the fair market value of a property arrived at through application of guidelines that consider a number of market conditions and economic factors.
Appraiser - This is the title given to the individual who conducts the appraisal and writes the appraisal report. Appraisers are usually certified by a state regulatory agency. In Indiana, appraisers are certified by the Indiana Professional Licensing Agency.
Arrears - The term used when taxes paid in the current year represent the taxes owed for the previous year.
Assessment - The official act of discovering, listing and appraising property for ad valorem tax purposes.
Assessment Appeal - The formal process through which taxpayers may dispute the assessed value of their property.
Assessed Value (AV) - The total dollar value assigned to all real property and improvements and personal property subject to taxation. Locally elected assessors determine property values with assessment guides prescribed by the Department of Local Government Finance.
Budget Order - The order contains the state’s certification of budgets, tax rates, and tax levies for each taxing unit in a county. The order also documents the total tax rate and the local homestead credit rate for each taxing district.
Deduction - A property tax benefit that reduces the assessed value of property. There are a number of property tax deductions available to Indiana taxpayers.
Exemption - A property tax benefit that excludes a property from taxation and, in some cases, assessment.
Homestead Deduction - The most commonly used property tax deduction in Indiana, which allows a homeowner who uses a property as his or her principal place of residence to qualify for a deduction of the lesser of 60% of the gross assessed value of the property or $45,000.
Levy - The product of a specified tax rate and the assessed value. Levy terminology includes “maximum levy” and “excessive levy.”
Market Value - The most probable price, estimated in terms of money, which a property would bring in a sale between a willing buyer and seller under arms-length conditions, in an open market with adequate market exposure and reasonable marketing time.
Personal Property - Personal property typically encompasses moveable items that are not permanently affixed to a physical structure.
Petition-Remonstrance Process - The petition and remonstrance process allows taxpayers to object to certain controlled projects or proposals initiated by a local unit of government.
Property Tax Levy - The property tax levy is the amount of money that a taxing body requires to be collected through the property tax system.
Property Tax Rate - A percentage applied to each taxing unit’s assessed valuation that will produce the amount of that taxing unit’s levy or, in other words, the product of dividing the levy by the assessed value. The tax rate is expressed in terms of “dollars per $100 of assessed value.”
Real Property - The interests, benefits, and rights inherent in the ownership of land and anything permanently attached to the land or legally defined as immovable.
Referendum - The local public question process generally applies to controlled projects and school operating referenda.
Trending - The process whereby property values are adjusted on an annual basis to bring them closer to market value-in-use.
Special Assessments - An assessment against property levied by a government entity to pay for specific improvements such as sidewalks, sewers, street improvements, etc.
Taxing District - This is the term for the geographic area within which taxing units have the authority to fund themselves via property taxes.
Taxing Unit - An entity that has the power to impose ad valorem property taxes. Examples include counties, cities, towns, townships, and school corporations.
Need more information?