WAVE 3 - Louisville, KYOversight costs many new Hoosier homeowners

Oversight costs many new Hoosier homeowners

By Janelle MacDonald - bio | email
Posted by Charles Gazaway - email

NEW ALBANY, IN (WAVE) - WAVE 3 has uncovered a problem that could cost some property owners a lot of money, but it doesn't have to. It's a simple oversight that many people apparently make when they buy a new home in Indiana. Now one woman is sharing a story that she hopes will help others.

Kim Fanning knows all about beginnings, from her music business named Notable Beginnings, to beginning a new life - new marriage, new home.

"We looked at, I think about 30 houses in all and this is the one we picked," Fanning said.

Now, after well over a year in her new home, Fanning also has a new mortgage payment.

"We got a notification for the mortgage company saying your new payment as of February 1 will be 1200 dollars," said Fanning. "It's 836 right now. It's a 50% increase almost."

When Fanning got that notice, she started asking questions and quickly found out it was because property taxes on her home had been underestimated.

"One year it was 1200 dollars, last year in 2008, it said it was 700-and-something dollars, this year it says it was 2500 dollars," Fanning said.

The reason was at the time of closing, Kim and her husband never filed for their homestead exemption.

"I found that there was deductions that you could take off of your taxes," said Fanning.

Linda Shirley, the deputy chief with the Floyd County Assessor's Office, said Indiana property owners get $45,000 off the assessed value of their home when calculating property taxes, as long as their home is worth more than $90,000 and as long as they file for it.

"Your exemption, your homestead, should be filed by the end of the year of the year that you purchase your property in," said Shirley.

According to Shirley, the problem is that many people, like Fanning, just aren't told that at closing, so they don't realize they have to do anything.

"We've told closing agents and realtors to please tell them that they need to come and file those homesteads," Shirley said.

The result, said Shirley, is, "Their tax bills are at least doubled."

Fanning said she hopes her story helps others avoid the lesson she and her husband found out the hard way. It is a mistake that cost them half their savings at the time of another new beginning, the pending birth of their son.

"I'm due in March," Fanning said, "and I'm not working after I have the baby and we have all these savings set aside, enough to get us through until I start working full time again."

Shirley says the State of Indiana is using a new disclosure form, which is filled out at the time of closing, where new property owners can claim their homestead exemption right then. If they do so, they don't need to file again. She thinks that will cut down on some of the confusion, however Shirley cautions there are other exemptions that still have to be filed for after closing but before the end of the year in which you buy.

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