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FOR
IMMEDIATE RELEASE
HB 1478 WOULD
DEVASTATE AFFORDABLE HOUSING
APARTMENTS MUST BE INCLUDED IN TAX-RESTRUCTURING
BILL
May 1, 2007
Indianapolis, IN
(Monday, April 23, 2007) - The rental housing
industry in Indiana cannot bear another tax
shift as proposed in House Bill 1478. That
is the message
Indiana Apartment Association (IAA) members
are trying to convey to the Ways and Means
Conference Committee of the Indiana General Assembly.
IAA
testified this morning before the committee.
"Indiana
is facing an increase in the number
of commercial apartment foreclosures due
to increased expenses in insurance
and property taxes along
with an inability to raise rents.
This is compounded by severely low occupancy rates,
stagnant income
levels and slow job creation," said
Lynne
Sullivan, executive director of the
Indiana Apartment Association. "HB 1478 would
negatively impact the rental housing
market. Rental housing
is unique in the scheme of property
taxes and provides a viable means of housing equal
to that of any
other residential property."
Rental properties
provide an affordable means of housing
for more than one-third of all
Indiana citizens. The move from the
old true tax value
of assessment rules to the more market-oriented
rules; tax restructuring provision
enacted in 2002 to help mitigate the effects of
the
assessment changes; and changes in
the business personal
property
assessments have had a devastating
effect on taxes for rental properties.
Legislative Services
Agency (LSA) data released
in 2005 comparing tax payments from
2002-2003 showed that the net assessed value of
non-homestead
residential
property, primarily rental property
increased almost twice as much as homestead property,
largely because
this property did not receive the
increased
homestead deduction.
Reassessment increased
the gross assessed
values of commercial apartments more
than any other business property type. Since commercial
apartments
are not eligible for the homestead
deductions
or credits, the tax bill increase
was larger than for residential property. According
to LSA,
non-homestead
properties (rentals) and commercial
apartments paid 76 percent of the increase in net
taxes
collected by the State from residential property.
Homestead
properties (homeowners) represent
71.4 percent of the housing units
in Indiana and paid 24 percent of the increase in net taxes collected
by the State from residential property. For every
new tax dollar collected from housing
properties (homestead, non-homestead and commercial apartments) $0.76
was paid by rentals and commercial apartments
"ß
The rental housing industry must be considered in this tax-restructuring plan.
If not, our industry will take another hit and those who least can afford it
could find themselves homeless as foreclosures on those properties increase,"
Sullivan
said. |
