Property tax in Indiana is calculated by multiplying your property’s assessed value, minus any deductions you qualify for, by the combined tax rate set by your local taxing districts. The state then applies a hard ceiling called the circuit breaker: an owner-occupied home can never be billed more than 1% of its gross assessed value, so a $200,000 homestead tops out at $2,000 a year no matter how high local rates climb. Bills come in two installments, due May 10 and November 10.1Indiana General Assembly. Indiana Code 6-1.1-22-9 – Property Taxes Due in Installments
A 2025 reform law, Senate Enrolled Act 1, is reshaping the homestead deduction system over the next several years, so the numbers on your 2026 bill will look different from previous years even if nothing about your house changed.
How Your Assessed Value Is Set
Indiana values property at its market value-in-use, which reflects what the property is worth given how the owner actually uses it rather than what a speculative buyer might pay for its highest-value hypothetical use.2Department of Local Government Finance. Citizen’s Guide to Property Tax The county assessor handles this using local sales data, adjusting values each year through a process called trending that compares prior assessments against actual recent sales in your neighborhood.3IN.gov. What is Trending
You learn about changes to your assessment through the Notice of Assessment of Land and Improvements, known as the Form 11. It shows the assessed value of your land and any structures and explains why the number changed.4Department of Local Government Finance. Notice of Assessment of Land and Improvements (Form 11) This is the starting point for your tax bill and, if the number looks wrong, for an appeal.
The Circuit Breaker Cap
Indiana’s circuit breaker caps your bill as a percentage of your gross assessed value. If the taxes calculated from local rates would exceed the ceiling, the state automatically applies a credit to bring the bill back down. The cap depends on property type:5Indiana General Assembly. Indiana Code 6-1.1-20.6-7.5 – Property Tax Credit
- Owner-occupied primary residences (homesteads): 1% of gross assessed value
- Other residential property, agricultural land, and long-term care facilities: 2%
- Commercial and industrial real property: 3%
- Business personal property: 3%
You do not need to apply. The credit appears automatically on your tax statement, labeled as a circuit breaker credit, and it often saves homeowners hundreds of dollars in districts where school, library, and municipal rates stack up.
Homestead Deductions After the 2025 Reform
Before any tax rate is applied, Indiana reduces a homestead’s assessed value through two deductions, and starting with taxes due in 2026 the system also applies a credit against the bill itself. All three pieces are in transition under SEA 1.
The Standard Homestead Deduction Is Phasing Out
The old standard deduction took the lesser of 60% of your assessed value or $48,000. That formula is gone. The deduction is now a flat dollar amount that shrinks each year until it disappears:6Indiana General Assembly. Indiana Code 6-1.1-12-37 – Standard Deduction for Homesteads
- 2025: $48,000
- 2026: $40,000
- 2027: $30,000
- 2028: $20,000
- 2029: $10,000
- 2030 and after: $0
The Supplemental Deduction Is Growing
After the standard deduction comes off, the supplemental homestead deduction removes a percentage of what’s left. SEA 1 raises that percentage each year on the same timeline the standard deduction winds down:7Indiana Department of Local Government Finance. Legislation Affecting Deductions, Exemptions, and Credits
- 2026: 40% of the remaining assessed value
- 2027: 46%
- 2028: 52%
- 2029: 57%
- 2030: 62%
- 2031 and after: 66.7%
The supplemental deduction cannot exceed 75% of the gross assessed value.7Indiana Department of Local Government Finance. Legislation Affecting Deductions, Exemptions, and Credits By 2031, when the standard deduction reaches zero, the enlarged supplemental deduction is meant to carry most of the weight.
The New Supplemental Homestead Credit
For taxes due in 2026 and after, SEA 1 adds a credit equal to 10% of your homestead tax liability, capped at $300. It reduces the bill itself rather than the assessed value, and it applies automatically.7Indiana Department of Local Government Finance. Legislation Affecting Deductions, Exemptions, and Credits
What This Looks Like on a $200,000 Home in 2026
Say your home has a gross assessed value of $200,000. The standard deduction removes $40,000, leaving $160,000. The supplemental deduction takes 40% of that, or $64,000, bringing the net assessed value to $96,000. At a 2% local rate, the preliminary bill is $1,920. The 10% supplemental credit cuts $192, dropping the bill to $1,728. The circuit breaker checks whether $1,728 exceeds 1% of $200,000; it does not, so no circuit breaker credit kicks in. Final bill: $1,728.
Other Deductions Worth Claiming
These are not automatic. You apply with your county auditor, and the deadline to have a deduction appear on the following year’s bill is generally December 31 of the assessment year, with the completed form filed by early January.
Mortgage Deduction
If you carry a mortgage, home equity line of credit, or land contract on your homestead, you can deduct the smallest of three amounts: the outstanding loan balance, half your assessed value, or $3,000.8Indiana General Assembly. Indiana Code 6-1.1-12-1 – Deduction for Property Financed by Mortgage or Installment Loan For most homeowners, the practical figure is $3,000.
Over-65 Benefits
Indiana residents 65 or older can qualify for two separate breaks if they meet income limits (currently $60,000 single, $70,000 joint). The over-65 property tax credit reduces the bill by $150. The over-65 circuit breaker credit caps the annual increase in your bill at 2% over the prior year’s amount, regardless of how much assessed value or rates rise.9Indiana General Assembly. Indiana Code 6-1.1-20.6-8.5 – Additional Credit for Homestead Property For seniors on a fixed income in an appreciating neighborhood, that cap is often the most valuable protection available.
Disabled Veteran Deduction
Veterans with at least 90 days of service and an honorable discharge can deduct $14,000 from the assessed value of their primary Indiana home if they have a total disability or are at least 62 with a VA disability rating of 10% or more.10Indiana General Assembly. Indiana Code 6-1.1-12-14 – Deduction for Totally Disabled Veteran The home’s assessed value cannot exceed $240,000.11Indiana Department of Veterans Affairs. Disabled Veteran Property Tax Deduction
When and How to Pay
Payments are due in two equal installments on May 10 and November 10.1Indiana General Assembly. Indiana Code 6-1.1-22-9 – Property Taxes Due in Installments When a due date lands on a weekend or holiday, the deadline moves to the next business day. In 2026, May 10 is a Sunday, so the spring installment is due Monday, May 11, 2026; the fall installment is due November 10, 2026.12Indiana Department of Local Government Finance. Property Tax Due Dates
You can mail a check to the county treasurer, pay in person, or use the county’s online portal. Most counties accept credit cards and e-checks online, though credit card payments usually carry a convenience fee around 2.5%. Keep your receipt or confirmation number.
If your mortgage lender escrows for taxes, the lender pays the county directly. You will still receive an informational tax statement from the county, so getting a statement does not necessarily mean you owe anything out of pocket. Once the mortgage is paid off, responsibility for paying taxes shifts back to you immediately, with no separate notice from the county.
What Happens If You Pay Late
Pay within 30 days of the due date with no prior delinquency on the parcel and the penalty is 5% of the unpaid amount. Later than 30 days, or if you already owe back taxes on the same property, and the penalty jumps to 10%.13Indiana General Assembly. Indiana Code 6-1.1-37-10 – Penalty for Delinquent Property Taxes Each additional year of delinquency adds another 10% penalty on the remaining principal, and the penalties stack.
Extended delinquency ends in a tax sale, where the county sells a lien on the property to recover what’s owed. After the sale, you have one year to redeem by paying the delinquent taxes, penalties, and the buyer’s costs.14Indiana General Assembly. Indiana Code 6-1.1-25-4 – Period of Redemption If the property was offered at the sale but drew no buyer, the redemption window shrinks to 120 days. Once that window closes, the buyer can petition for a tax deed and take ownership outright.
Appealing an Assessment That Looks Too High
If the assessed value on your Form 11 looks wrong, you have a limited window to challenge it. When the Form 11 goes out before May 1, the appeal deadline is June 15 of the assessment year. If the notice is mailed on or after May 1, the deadline becomes June 15 of the year the treasurer mails the tax statement.15Indiana General Assembly. Indiana Code 6-1.1-15-1.1 – Filing Deadline for Assessment Appeals Miss it, and you forfeit the right to challenge that year’s assessment. Put the date on the calendar the day the Form 11 arrives.
The appeal starts with a preliminary conference where the assessor’s office reviews your evidence. Bring photographs, a recent appraisal, and comparable sales from your neighborhood. If you reach agreement, both sides sign a stipulation that goes to the Property Tax Assessment Board of Appeals for approval. If not, the PTABOA schedules a formal hearing. Its decision can be appealed to the Indiana Board of Tax Review.
A Note for Business Owners
Property tax in Indiana reaches beyond real estate: businesses owe tax on equipment, furniture, fixtures, and other tangible assets used in operations. Starting with the 2026 assessment date, the acquisition-cost threshold for the personal property exemption rose from $80,000 to $2,000,000. If the total original cost of all your business personal property in a county is under $2 million, that property is exempt.16Indiana General Assembly. Indiana Code 6-1.1-3-7.2 – Exemption for Certain Business Personal Property Businesses over the threshold file Form 102 or 103 with the county assessor by May 15 each year. Those who previously claimed the exemption on a filed return do not need to refile unless their property value grows past the threshold.