§ 6-1.1-4-4.5 — Annual adjustment of assessed value of real property; state review and certification; base rate methodology; adjustment in assessed value based on estimated true tax value

Indiana § 6-1.1-4-4.5

• Jurisdiction: Indiana
• Art. 1.1: PROPERTY TAXES
• Ch. 4: Procedures for Real Property Assessment

Text

5. (a) The department of local government
finance shall adopt rules establishing a system for annually adjusting
the assessed value of real property to account for changes in value in
those years since a reassessment under section 4.2 of this chapter for
the property last took effect.
(b) Subject to subsection (f), the system must be applied to adjust
assessed values beginning with the 2006 assessment date and each year
thereafter that is not a year in which a reassessment under section 4.2
of this chapter for the property becomes effective.
(c) The rules adopted under subsection (a) must include the
following characteristics in the system:
(1) Promote uniform and equal assessment of real property within
and across classifications.
(2) Require that assessing officials:
(A) reevaluate the factors that affect value;
(B) express the interactions of those factors mathematically;
(C) use mass appraisal techniques to estimate updated property
values within statistical measures of accuracy; and
(D) provide notice to taxpayers of an assessment increase that
results from the application of annual adjustments.
(3) Prescribe procedures that permit the application of the
adjustment percentages in an efficient manner by assessing
officials.
(d) The department of local government finance must review and
certify each annual adjustment determined under this section.
(e) For an assessment beginning after December 31, 2022,
agricultural improvements such as but not limited to barns, grain bins,
or silos on land assessed as agricultural shall not be adjusted using
factors, such as neighborhood delineation, that are appropriate for use
in adjusting residential, commercial, and industrial real property. Those
portions of agricultural parcels that include land and buildings not used
for an agricultural purpose, such as homes, homesites, and excess
residential land and commercial or industrial land and buildings, shall
be adjusted by the factor or factors developed for other similar property
within the geographic stratification. The residential portion of
agricultural properties shall be adjusted by the factors applied to
similar residential purposes.
(f) In making the annual determination of the base rate to satisfy the
requirement for an annual adjustment for each assessment date, the
department of local government finance shall, not later than March 1
of each year, determine the base rate using the methodology reflected
in Table 2-18 of Book 1, Chapter 2 of the department of local
government finance's Real Property Assessment Guidelines (as in
effect on January 1, 2005), except that the department shall adjust the
methodology as follows:
(1) Use a six (6) year rolling average adjusted under subdivision
(3) instead of a four (4) year rolling average.
(2) Use the data from the six (6) most recent years preceding the
year in which the assessment date occurs for which data is
available, before one (1) of those six (6) years is eliminated under
subdivision (3) when determining the rolling average.
(3) Eliminate in the calculation of the rolling average the year
among the six (6) years for which the highest market value in use
of agricultural land is determined.
(4) After determining a preliminary base rate that would apply for
the assessment date without applying the adjustment under this
subdivision, the department of local government finance shall
adjust the preliminary base rate as follows:
(A) If the preliminary base rate for the assessment date would
be at least ten percent (10%) greater than the final base rate
determined for the preceding assessment date, a capitalization
rate of:
(i) for purposes of determining the preliminary base rate for
the January 1, 2025, and the January 1, 2026, assessment
dates, nine percent (9%); and
(ii) for purposes of determining the preliminary base rate for
assessment dates before January 1, 2025, and for assessment
dates after December 31, 2026, eight percent (8%);
shall be used to determine the final base rate.
(B) If the preliminary base rate for the assessment date would
be at least ten percent (10%) less than the final base rate
determined for the preceding assessment date, a capitalization
rate of six percent (6%) shall be used to determine the final
base rate.
(C) If neither clause (A) nor clause (B) applies, a capitalization
rate of seven percent (7%) shall be used to determine the final
base rate.
(D) In the case of a market value in use for a year that is used
in the calculation of the six (6) year rolling average under
subdivision (1) for purposes of determining the base rate for the
assessment date:
(i) that market value in use shall be recalculated by using the
capitalization rate determined under clauses (A) through (C)
for the calculation of the base rate for the assessment date;
and
(ii) the market value in use recalculated under item (i) shall
be used in the calculation of the six (6) year rolling average
under subdivision (1).
(g) For assessment dates after December 31, 2009, an adjustment in
the assessed value of real property under this section shall be based on
the estimated true tax value of the property on the assessment date that
is the basis for taxes payable on that real property.
(h) The department shall release the department's annual
determination of the base rate on or before March 1 of each year.
(i) For the January 1, 2025, assessment date only, the base rate
determined using the capitalization rate under subsection (f)(4)(A)(i)
shall not apply to land that is assessed under section 12 of this chapter.

Legislative History

As added by P.L.198-2001, SEC.8. Amended by P.L.245-2003, SEC.4; P.L.228-2005, SEC.4; P.L.136-2009, SEC.2; P.L.112-2010, SEC.1; P.L.112-2012, SEC.3; P.L.180-2016, SEC.2; P.L.255-2017, SEC.6; P.L.232-2017, SEC.2; P.L.86-2018, SEC.26; P.L.8-2022, SEC.1; P.L.68-2025, SEC.12; P.L.230-2025, SEC.19.