Just found out property taxes are twice as much for investment properties than then are for owner occupied in Indianapolis. If I were to move to Indianapolis and buy a home as a primary residence, live in it for at least a year, and then potentially start renting it out, would I have to start paying twice the property taxes? Or would I have the lower property tax rate locked in?
Real Estate Agent · Member since 2018 · 53 posts · 24 votes
4y
In most, if not all, municipalities across America, the property taxes for investment properties are higher. This is due to the Homestead exemption that is placed on owner-occupant properties. The homestead exemption is a tax break for owner-occupant homes. Therefore, when you move out of a house and turn it into an investment property, you should contact your assessor and update your property tax classification. Failing to do so can be viewed as a criminal offense.
Send me a private message; I may be able to help you get your taxes reduced.
Investor · Indianapolis, IN · Member since 2017 · 9 posts · 1 vote
4y
Hi,
We own investment properties in the Indianapolis area.
In Indiana owner occupied properties are taxed at approx. 1% of assessed value. You will get the additional homestead tax reduction if you claim the property as your primary residence. You can also get some additional deductions for mortgages, senior citizens, disabled etc.
Non-Owner Occupied properties are taxed at 2%, and commercial properties owe 3% of the assessed property value each year.
It is my understanding that if you start using the property as a rental and claim it as such, you are then taxed at 2%.
I know of some people that claim their rentals as owner occupied, but we follow the rules and claim all of our rentals as non-owner occupied and pay the double tax.