Indiana law provides a property tax deduction and a 1 percent property tax cap for a "homestead" property.
A homestead is an individual's "principal place of residence," that consists of a house, mobile home, or manufactured home and the immediately surrounding one acre of real estate.
Only one homestead deduction may be granted to an individual or married couple in the same year.
In 2009, the Indiana General Assembly passed a law that increased penalties and improved resources for county auditors to collect additional property taxes and penalties from property owners claiming unlawful homestead deductions.
"Due to the large reduction in property taxes for homesteads, property owners illegally claiming the homestead deduction unjustly raises the property tax rates on law abiding taxpayers," Alumbaugh said. "The verification program we will undertake will ensure fairness in our property tax system by catching property owners who are unlawfully receiving benefits of the deduction on non-homestead property."
The search for illegal homestead deductions in Clay County will begin July 1. A property owner found to be unlawfully claiming a homestead deduction after July 1 will be required to pay the amount of property taxes avoided for the prior three years plus a 10 percent penalty.
Clay County has contracted SRI, Inc., an Indianapolis-based company that conducts county tax sales, commissioners' certificate and deed sales and provides local government consulting services to more than 80 counties in Indiana, Michigan and Colorado.
Any property owner that believes they may be unlawfully claiming a homestead deduction in Clay County should contact the county auditor's office at 448-9001.