Property Taxes in Indiana: Caps, Deductions, and Appeals

Property taxes in Indiana are based on your property’s assessed value, capped by the state constitution at 1% to 3% of that value depending on the type of property, and paid in two installments each year on May 10 and November 10. The average effective rate across the state sits around 0.76%, but what you actually owe depends on the local taxing units that overlap your parcel and the deductions and credits you qualify for. Several of those benefits are mid-transition under Senate Enrolled Act 1, passed in 2025, so the math changes year to year through the end of the decade.

How Your Property’s Value Is Set

Every parcel in Indiana is assigned a “market value-in-use,” which reflects what the property is worth based on how it’s actually being used rather than its highest possible sale price. County assessors do the work across Indiana’s 92 counties, and the Department of Local Government Finance sets the rules and reviews local tax rates and levies each year.¹²

Assessments use January 1 as the snapshot date. Whatever you own, and whatever condition it’s in on that day, determines your assessed value for the upcoming cycle.³ A half-finished addition on January 1 is valued at its partially completed state, not what it will be worth when the contractor finishes.

The Constitutional Tax Caps

Indiana’s constitution includes a safeguard commonly called the Circuit Breaker that puts a hard ceiling on your total property tax bill as a percentage of gross assessed value. If the taxes calculated by all overlapping local units add up to more than the cap, you receive a credit that brings the bill back down. The caps are:⁴

1% for homestead property (your primary residence)
2% for other residential property, agricultural land, and long-term care property
3% for commercial, industrial, and personal property

A home with a gross assessed value of $250,000 cannot be billed more than $2,500 in a given year across all local taxing units combined. The credit shows up as a line item on your statement.

One important carve-out: taxes approved by voters in a local referendum sit outside the cap. School districts and other local governments sometimes put building projects or operating levies on the ballot, and if voters approve them, those charges are added on top of the cap percentages.⁴ Your bill breaks these out as a separate line, and in areas with multiple active referendums they can push the effective rate noticeably above the headline cap.

Homestead Deductions and the 2025 Phasedown

If you own and live in your home as your primary residence, two deductions reduce your taxable assessed value before tax rates are applied. Both are in the middle of significant changes under legislation passed in 2025.

The Standard Deduction

The standard homestead deduction is a flat dollar reduction. For the 2026 assessment date (taxes payable in 2027), it is $40,000.⁵ It is being phased down to zero by 2030:

2025: $48,000
2026: $40,000
2027: $30,000
2028: $20,000
2029: $10,000
2030 and after: $0

Before 2025, the deduction was the lesser of 60% of assessed value or $48,000. That percentage calculation no longer applies; the deduction is just the flat dollar amount above.⁵

The Supplemental Deduction

The supplemental deduction picks up where the standard deduction leaves off, and it’s being phased up as the standard deduction shrinks. For taxes first due and payable in 2026, it equals 40% of your assessed value after subtracting the standard deduction, with the total supplemental deduction capped at 75% of your gross assessed value.⁶

On a $200,000 home for taxes payable in 2026, the standard deduction removes $40,000, leaving $160,000. The supplemental deduction then takes 40% of that $160,000, or $64,000. The net assessed value you’re taxed on drops to $96,000. The legislature’s long-term plan phases the supplemental deduction up to two-thirds of assessed value as the standard deduction disappears, so the net effect for most homeowners should roughly balance out over time.

You must file an application with your county auditor to receive these deductions. They do not apply automatically.

Relief for Seniors

Indiana overhauled its property tax benefits for residents 65 and older in 2025. The old Over 65 Deduction under Indiana Code 6-1.1-12-9 was repealed for assessment dates starting January 1, 2025, and replaced with two credit-based programs that work differently.⁷

Over 65 Credit

The new Over 65 Credit provides a flat $150 reduction to your tax bill. Unlike the old deduction, it reduces your actual tax liability rather than your assessed value, which means it helps even if your bill is already at the constitutional cap. To qualify, you must be at least 65 by December 31 of the prior year, and your adjusted gross income cannot exceed $60,000 if you filed a single return or $70,000 for a joint return. There is no assessed value limit on the property.⁷ File the application with your county auditor by January 15 of the year the property taxes are first due. A surviving spouse who is at least 60 and hasn’t remarried may also qualify if the deceased spouse was 65 at the time of death.

Over 65 Circuit Breaker Credit

Separately, the Over 65 Circuit Breaker Credit prevents your property tax bill on a qualifying homestead from increasing by more than 2% compared to the prior year. The income limits mirror the Over 65 Credit ($60,000 single, $70,000 joint), and the old $240,000 assessed value cap has been removed.⁷ Seniors who qualify can claim both the $150 credit and the circuit breaker protection.

When Payments Are Due and What Late Costs

Property taxes are due in two equal installments on May 10 and November 10.⁸ You can pay in person at the county treasurer’s office, by mail, or through your county’s online portal. Online payments by credit card or e-check usually carry a small processing fee. If you mail a payment, the U.S. Postal Service postmark date counts as the date of payment; a private postage meter stamp generally won’t protect you if the envelope arrives late.

If you have a mortgage, your lender may pay property taxes out of an escrow account funded through your monthly mortgage payment. The statement is typically sent directly to the lender and may be watermarked “IN ESCROW,” but you remain responsible for confirming the right amount was paid on time.

Missing a deadline triggers automatic penalties. Pay the full amount within 30 days of the due date with no prior delinquencies on the same parcel, and the penalty is 5% of the unpaid taxes. Miss that 30-day window, or carry an outstanding penalty from a prior installment, and the penalty jumps to 10%.⁹ The prior-delinquency rule catches people off guard: if you paid your spring installment late and still owe a penalty on it, your fall installment is automatically hit with the 10% rate even if you pay just one day late.

If paying the full installment at once is difficult, Indiana law requires every county treasurer to accept partial payments. Some counties also offer monthly payment plans with automatic bank deductions spread over up to 12 months. The treasurer must notify you on the tax bill or envelope that partial payments are available.¹⁰

Appealing an Assessment You Think Is Too High

If you believe your assessed value is too high, you can challenge it, but the window is tight. You generally have 45 days after your county mails the Notice of Assessment (Form 11) to submit a written appeal on Form 130 with the county assessor’s office.¹¹ For most counties in 2026, the Form 11 is mailed by April 30 and the appeal deadline falls on June 15. For certain types of factual errors, you have up to three years from when the taxes were first due to file.

The process starts with a preliminary conference where a representative from the assessor’s office reviews your case. If you agree, both sides sign a stipulation that goes to the Property Tax Assessment Board of Appeals (PTABOA) for approval. If not, the PTABOA schedules a formal hearing. Come prepared with evidence. Appraisals from a licensed appraiser, recent sales of comparable homes in your neighborhood, and photographs showing condition issues are the strongest tools. An opinion that your taxes are “too high” without supporting data rarely moves the needle. If the PTABOA rules against you, you can appeal to the Indiana Board of Tax Review within 45 days of receiving the determination.¹²

What Happens If You Let Taxes Go Unpaid

Delinquent property taxes do not just accumulate penalties forever. Eventually the county will sell a lien on the property at a public tax sale, with a minimum bid equal to all delinquent taxes, current-year taxes, penalties, and administrative costs.¹³ The buyer doesn’t immediately own the property, but your clock starts ticking.

For most properties, the redemption period is one year from the date of sale.¹⁴ To redeem, you must pay 110% of the minimum bid if you act within six months, or 115% after six months. On top of that, you owe the buyer 5% annual interest on any amount paid above the minimum bid, plus reimbursement for any taxes they paid after the sale with another 5% annual interest.¹³ Attorney’s fees and title search costs can be tacked on. Properties on the county’s vacant and abandoned list have no redemption right at all, meaning the sale is effectively final.

The cost of redeeming after a tax sale is dramatically higher than the original bill, even with penalties. If you’re falling behind, the partial payment option is a far better route than waiting for the county to act.

A Note for Business Owners

Indiana also taxes business personal property, which includes equipment, furniture, fixtures, and inventory. Businesses file returns annually (Forms 102, 103, or 104 depending on the type of property) by May 15.¹⁵ If the total original acquisition cost of all your business personal property in Indiana is under $2,000,000, you can claim an exemption, though you still need to file Forms 103 Short and 104 and check the box indicating your assets fall below the threshold.¹⁶ Business personal property falls under the 3% constitutional cap along with commercial and industrial real estate.⁴

1
Indiana General Assembly. Indiana Code 6-1.1-35-1 – Duties of Department of Local Government Finance
2
Department of Local Government Finance. Citizen’s Guide to Property Tax
3
Department of Local Government Finance. 2026 Assessment Calendar
4
Indiana General Assembly. Indiana Code 6-1.1-20.6-7.5 – Calculation of Credit
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Indiana General Assembly. Indiana Code 6-1.1-12-37 – Standard Deduction for Homesteads
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Indiana General Assembly. Indiana Code 6-1.1-12-37.5 – Supplemental Deduction for Homesteads
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Department of Local Government Finance. Legislation Affecting Deductions, Exemptions, and Credits
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Indiana General Assembly. Indiana Code 6-1.1-22-9 – Tax Installment Due Dates
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Indiana General Assembly. Indiana Code 6-1.1-37-10 – Penalties for Delinquent Taxes
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Indiana General Assembly. Indiana Code 6-1.1-22-9.7 – Property Taxes; Monthly Payments; Partial Payments
11
Hamilton County, IN. Assessment Appeal Process
12
indy.gov. The Property Assessment Appeals Process
13
Indiana General Assembly. Indiana Code 6-1.1-24-2 – Notice of Tax Sale
14
Indiana General Assembly. Indiana Code 6-1.1-25-4 – Period for Redemption
15
Hancock County, IN. Business Personal Property
16
indy.gov. Business Personal Property Taxes