Indiana changed how homestead property taxes work in 2025, and the changes phase in every year through 2031. Here is how the system works, what changed, and how to estimate the bill on a house before you buy it.
I'm Wes Johnston, a Realtor with Trueblood Real Estate in Fishers. I'm not a tax advisor, and this page isn't tax advice. It's the plain-English version of what the Indiana Department of Local Government Finance (DLGF) publishes, organized around the questions buyers actually ask me, with a source on every number.
Property tax is one of the few costs of owning a home you can estimate before you buy — and one of the most commonly misjudged, because the bill you see on a listing is almost always last year's bill for the last owner. Indiana's 2025 property tax law (Senate Enrolled Act 1) makes that gap bigger, because homestead deductions and credits are changing every year through 2031.
The county assesses your home's value, local taxing units set rates in dollars per $100 of assessed value, and deductions and credits reduce what you owe. Indiana taxes are paid a year behind: the bill you pay in 2026 is for the 2025 assessment, which DLGF shorthands as “2025 pay 2026.”
Bills come in two installments, due May 10 and November 10, paid to the county treasurer. A late installment carries a 5% penalty if paid within 30 days with no prior delinquency, and 10% otherwise.
Indiana's constitution caps property tax at a percentage of a property's gross assessed value — the “circuit breaker.” It is 1% for a homestead you live in as your primary residence, 2% for other residential property including rentals and second homes, and 3% for commercial property. On a homestead assessed at $100,000, the cap is $1,000.
One important exception: voter-approved referendum levies sit outside the caps. When a school operating or capital referendum passes, it can push a capped homeowner's bill above 1%. That's why the November ballot matters to buyers (more below).
Senate Enrolled Act 1 (2025) phases out the homestead standard deduction and phases up the supplemental deduction. Per DLGF, the standard deduction is $48,000 for 2025 pay 2026, then $40,000 (2026 pay 2027), $30,000 (2027 pay 2028), $20,000 (2028 pay 2029), $10,000 (2029 pay 2030) and $0 from 2030 pay 2031 on.
The supplemental homestead deduction, applied after the standard deduction, rises from 40% for taxes due in 2026 to 46% (2027), 52% (2028), 57% (2029), 62% (2030) and 66.7% from 2031 on. DLGF says the 2026 legislation (HEA 1210) left both schedules as enacted.
What that means for any one house depends on its value and local rates, so I don't quote a blanket “your taxes will go up/down” — I run the actual numbers for the property.
Starting with taxes due in 2026, homestead owners receive a credit equal to the lesser of $300 or 10% of the property's tax liability. There's no application; the county auditor applies it to properties that have the homestead deduction. Under the 2026 law, any credit beyond the tax owed can't be carried forward.
You can apply at closing: the Indiana Sales Disclosure Form (State Form 46021) can serve as the application for the homestead deduction. Or file Form HC10 with the county auditor where the home is. Either way, it must be filed by January 15 of the year the taxes are first due.
You don't need to refile every year unless ownership changes. But under the 2026 law, if you stop qualifying — the home stops being your primary residence, for example — you must tell the auditor within 60 days. Wrongly claiming the deduction can bring back taxes plus a 10% penalty, and the auditor can bill up to three years back.
Only one homestead deduction per person or married couple in a given year. Check your own county auditor's page for local instructions.
Three reasons. First, taxes run a year behind, so the bill you see at closing reflects the seller's assessment and the seller's deductions. Second, if the seller had a homestead and you're buying a rental or second home, you lose the homestead deductions and credit and move from the 1% cap to the 2% cap. Third, the Indiana residential purchase agreement itself warns that the next bill can be much higher than the last one, especially on new or recently reassessed homes.
New construction is where this surprises people most: a recent bill may not reflect the finished house. Always estimate from the current assessment and your own situation, not the listing's tax line.
The method I use with clients: start from the county's current assessed value, not the list price. If it will be your primary home, apply the homestead deductions for the pay year you'll be in, apply the local rate, then check the result against the 1% cap and add any referendum rate on top. If it will be a rental or second home, skip the homestead deductions and use the 2% cap.
Then call the county auditor or use the county's tax estimator to confirm the local rate. It's ten minutes of work that can change which house you buy. To see what the tax does to your monthly payment, use my Indiana mortgage calculator.
Since July 1, 2025, Indiana property tax referendums can only be held at general elections, and every new ballot question has to state the estimated yearly cost for a median-value home. Referendum levies sit outside the 1% cap, so they matter to your carrying cost.
In the areas I cover, November 2026 ballot questions include operating referendums for Zionsville, Sheridan, Westfield Washington, Carmel Clay, Noblesville, Clark-Pleasant (parts of Greenwood), MSD Washington Township (parts of Broad Ripple), and the Indianapolis Public Education Corporation for IPS-boundary addresses (see Downtown, Irvington and Fountain Square). Each community guide has the rate and the ballot's own cost estimate.
DLGF posts every certified question on its referendum page. Confirm the current terms there or with your county election office before you rely on any summary.
File Form 130 with your local assessing official. The deadline is June 15 — of the assessment year if your assessment notice (Form 11) was mailed before May 1, or of the year the tax bill is mailed if the notice came later.
The process runs from an informal meeting with the assessor, to a county board (PTABOA) hearing, to the Indiana Board of Tax Review and then the Tax Court. You don't need an appraisal; sales of your home or comparable homes can be evidence. While an appeal is pending, you can pay based on the prior year's assessment without penalty. Recent comparable sales are exactly what I can pull for you.
DLGF lists several, including an Over 65 Credit (now $150, which replaced the old over-65 deduction, and from January 1, 2026 requires living on the property), disabled veteran deductions and new veteran credits starting with 2026 pay 2027, and a blind or disabled credit. Eligibility rules are specific, so check DLGF's deductions page or your county auditor.
Indiana counties also levy a local income tax on top of the 2.95% state rate. Per the Indiana Department of Revenue's October 1, 2026 notice, rates in the counties I cover include 1.1% in Hamilton, 1.4% in Johnson, 1.7% in Hendricks, 1.71% in Boone and 2.02% in Marion. The 2025 law also restructures local income taxes, but the 2026 legislation pushed that change back to 2029.
Send me the address. I'll pull the current assessment, apply the deductions for your situation and the local rate, add any referendum on the ballot, and show you the math — before you write an offer, not after you close.
I'm not a tax advisor, and for anything beyond a purchase estimate I'll point you to one. But a buyer should never be surprised by the first tax bill.
Fishers-based. Honest numbers before you write the offer. Committed to your success.
Send the address and whether it will be your primary home. I'll send back a tax estimate with the math shown.
Send the AddressIf you're selling to buy, start with a real number rather than a national algorithm's guess.
Send the address and whether it will be your primary home, a rental or a second home. I'll send back the estimate with the math.
Not tax advice; for anything beyond a purchase estimate, I'll point you to a tax professional.
This page is general information, not tax or legal advice. Figures are from the Indiana Department of Local Government Finance and Department of Revenue as of September 2026 and can change with new legislation. Confirm your specifics with your county auditor or a tax professional.