Wednesday, January 7, 2009

Missed Homestead Credit - Was Someone Actually Listening?

Probably the No. 1 consumer complaint we used to get at the Title Insurance Division was the failure of title agencies to timely file homestead tax credit forms. When the deadlines were missed, consumers ended up owing hundreds if not thousands more in property taxes than they otherwise would.

During 2007, I wrote up a memo outlining the fact that when a homeowner buys property, a sales disclosure form gets filed. The sales disclosure form includes a statement in which the buyer identifies under oath whether he will be living on the property. That's exactly the same information the homeowner was required to provide on the homestead form to qualify for that credit.

I made the argument, why not just let the Sales Disclosure form which has to be executed at closing and submitted to the auditor, substitute for the Homestead Credit form? That way the problem of title agencies and consumers forgetting to file the homestead form after closing on the purchase of a home would eliminated. No one forgets the Sales Disclosure form which is done at closing and is sent in right away. Many people though would forget the Homestead Credit form which could not be filed immediately, but could only be filed for weeks if not months later when the property is finally transferred on the rolls of not only the county, but often also the township.

I was going to make a legislative recommendation to this effect, and then I stumbled onto IC 6-1.1-20.9-3.5 which, passed by the legislature in 2008, allowed the Sales Disclosure form to substitute for the Homestead Credit form. Okay, I'm going to assume someone was actually listening to me and took my idea to the legislature. I doubt that happened, but it is nice to consider.

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