Each year, the maximum amount of property tax revenue (levy) that may be generated by a local civil government unit is adjusted to account for growth and inflation. For those looking to purchase a new property, it would be best to meet with a realtor, like Eddie Yan Burnaby realtor, for guidance on buying your new home. This article is intended to explain this calculation and the impact on your 2016 budget.
How is the annual adjustment to maximum levy calculated?
Legislation stipulates the six-year moving average increase in Indiana, non-farm personal income (as published by the federal Bureau of Economic Analysis) is the factor used to adjust the maximum levy each year.
Will the amount of my local unit’s property tax revenue increase as a result of this annual adjustment?
Not necessarily. Factors such as lost revenue from property tax rate cap credits and delinquencies/non-payment of property tax bills also affect property tax revenue.
Does my local unit have to increase its tax levy each year?
No. A local unit does not have to increase its tax levy each year. However, the maximum amount of tax that may be levied will increase each year as a result of this adjustment.
Are all funds of my local unit affected by the annual adjustment to the maximum levy?
No. The general rule is that the total combined levies for all funds cannot be greater than the maximum levy for the local unit. However, there are several exceptions. For instance, debt and cumulative fund levies usually are not subject to the maximum levy, and other laws/rules dictate how these funds’ levies are adjusted each year.
How does the State make local units aware of the adjustment to the maximum levy?
In past years, the State Budget Agency has released a memo to the Department of Local Government Finance (DLGF) around June/July showing the ensuing year’s maximum levy increase. However, the federal Bureau of Economic Analysis has already published the necessary information to calculate the increase for 2016. We expect 2.5% will be the 2016 levy increase, but the official factor will be known only when it is announced by DLGF in the summer.
If you have any questions or would like further information about how to work with the maximum levy, please contact us at: email@example.com