Property Tax help

Indianapolis, Indiana
General Real Estate Investing
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Property Tax help

James Zobrisky
Member since 2021 · 16 posts · 5 votes

I currently own a property I am renting in zip code 46256 and I have noticed significant property tax increases. This is my first rental property and I just received notice my county tax has increased from $1,534 in October 2024 to $3,019 as of April 2025, increasing my monthly payments $429. As this will significantly cut into my cash flow, is this something I should look into? Is it common for property taxes to increase this much? Any help, advice would be greatly appreciated.

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John Clark
Member since 2018 · 1k+ posts · 1k+ votes
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Quote from @James Zobrisky:

I currently own a property I am renting in zip code 46256 and I have noticed significant property tax increases. This is my first rental property and I just received notice my county tax has increased from $1,534 in October 2024 to $3,019 as of April 2025, increasing my monthly payments $429. As this will significantly cut into my cash flow, is this something I should look into? Is it common for property taxes to increase this much? Any help, advice would be greatly appreciated.

Probably too late this time, but always contest your assessed values. Look in the yellow pages for lawyers who specialize in property valuation appeals.
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  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    1y
    Quote from @James Zobrisky:

    I currently own a property I am renting in zip code 46256 and I have noticed significant property tax increases. This is my first rental property and I just received notice my county tax has increased from $1,534 in October 2024 to $3,019 as of April 2025, increasing my monthly payments $429. As this will significantly cut into my cash flow, is this something I should look into? Is it common for property taxes to increase this much? Any help, advice would be greatly appreciated.

    Probably too late this time, but always contest your assessed values. Look in the yellow pages for lawyers who specialize in property valuation appeals.
    3Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    1y

    Yes, a sudden jump in property taxes like that can be legitimate—but it's definitely worth investigating, especially for a rental property where cash flow matters. Here’s how to approach it:

    Why Your Property Tax May Have Increased

    • Reassessment: Counties typically reassess property values every 1–3 years, and if your property value increased significantly (or if improvements were made), your assessed value—and thus taxes—could spike.
    • Renter Classification: Many jurisdictions charge a higher tax rate for non-owner-occupied or rental properties. If this is your first year renting it out, that may explain the jump.
    • Exemptions Lost: If you previously had a homestead exemption or similar, renting the property can remove those benefits, resulting in higher taxes.
    • County-wide Increases: Local tax levies, bond approvals, or budget increases for schools or infrastructure can also drive up rates.

    What You Can Do

    1. Review Your Tax Assessment:
      • Check your county assessor’s site for the assessed value of your property.
      • Compare it to similar properties in the area. If your assessment is significantly higher, you may have grounds to appeal.
    2. Appeal the Tax Assessment:
      • You can usually file an appeal within 30–60 days of receiving your tax notice.
      • Use comparable sales or appraisals to challenge the assessed value.
    3. Check for Exemptions or Classification Errors:
      • Make sure the property isn’t misclassified. Sometimes errors in occupancy type or square footage happen.
      • See if your state offers any rental property tax relief (some do for small landlords).

    Tax Planning Tips

    • Deductibility: Property taxes on rental property are 100% deductible on your Schedule E, reducing your taxable rental income.
    • STR Loophole or REPS: If you operate short-term rentals or qualify as a Real Estate Professional (REPS), you may be able to offset this and other expenses against W-2 income.
    • Pass-through Entity?: If you hold the rental in an LLC taxed as an S Corp, make sure tax payments and expense tracking are properly routed for maximum deductions (especially with property tax hikes).

    This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

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  • James McGovern
    Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 409 votes
    1y

    Property taxes are going up across the United States. Reassessments are at the root of this challenge. The solution is to get politically involved and compel government to shrink itself 

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  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    1y

    Not sure if you have time but you can appeal the assessment. See what value they gave and get comps from an agent to appeal it. It is happening all over the place

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  • Aaron ZimmermanBusiness Member
    Accountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
    1y

    When you buy a property, you want to look at the assessed value that the previous owner was assessed at. If that value is significantly lower than your purchase price, you can almost guarantee property taxes will go up.

    For your property taxes now, see if you can assess or see if you're eligible for any exemptions that would reduce your property taxes 

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  • Maurice Shirley
    Real Estate Agent · Indianapolis · Member since 2025 · 10 posts · 4 votes
    1y

    Hi @James Zobrisky! Local Indy realtor and investor here. Without knowing the full picture of the property, it could be the property was reassessed as others have noted. It could also be due to the Homestead Exemption being removed/expired since the home isn't owner-occupied. In any case, you should definitely speak with the Marion County Treasure's Office to get a more in-depth account of what occurred!

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