Quick Summary: A price reduction lowers your loan a little. A seller credit puts the…
Indiana Property Tax Changes in 2026: What Homeowners Need to Know
Quick Summary
Indiana’s property tax law, Senate Enrolled Act 1, added a Supplemental Homestead Credit worth 10% of your bill, up to $300, starting with 2026 bills. Beginning with 2027 bills, the flat standard homestead deduction phases down each year while the percentage-based supplemental deduction grows. Your homestead must be on file to receive either.
What Changed Under Indiana’s Property Tax Law?
Governor Braun signed Senate Enrolled Act 1 in April 2025. For homeowners, it made three main changes:
- A new Supplemental Homestead Credit equal to 10% of your property tax bill, capped at $300
- A larger supplemental homestead deduction that increases a little each year
- A phase-down of the flat $48,000 standard homestead deduction until it reaches zero
Indiana bills property taxes a year behind. Your bill payable in 2026 covers the 2025 assessment, and your bill payable in 2027 covers the 2026 assessment.
Did the New Law Affect My 2026 Tax Bill?
Yes. Bills payable in 2026 were the first to include the new Supplemental Homestead Credit, and the supplemental deduction rose from 37.5% to 40%. The standard deduction stayed at $48,000 for 2026 bills. Look for a line labeled “Supplemental Homestead Credit” on your spring or fall 2026 bill.
How the Homestead Credit Works
The credit equals 10% of your property tax bill, up to $300. It’s applied near the end of the calculation, after your deductions and the property tax caps have been applied.
- A $2,000 tax bill gets a $200 credit.
- A $3,500 tax bill gets the maximum $300 credit.
You don’t need to apply separately. If your homestead deduction is on file with your county auditor, the credit is applied automatically.
Homestead Deduction Schedule
| Taxes payable in | Standard deduction | Supplemental deduction |
|---|---|---|
| 2026 | $48,000 | 40% |
| 2027 | $40,000 | 46% |
| 2028 | $30,000 | 52% |
Under current law, the standard deduction continues to drop until it reaches zero, while the supplemental deduction rises to two-thirds (66.7%) of the remaining value. The supplemental deduction is calculated on your assessed value after the standard deduction comes off.
Example: A $250,000 Home in Northwest Indiana
This simplified example holds the assessed value steady and uses a 2% tax rate. Your actual rate depends on where you live.
| 2026 bill | 2027 bill | |
|---|---|---|
| Assessed value | $250,000 | $250,000 |
| Standard deduction | $48,000 | $40,000 |
| Supplemental deduction | $80,800 (40%) | $96,600 (46%) |
| Taxable value | $121,200 | $113,400 |
| Tax at 2% | $2,424 | $2,268 |
| Homestead credit (10%) | $242 | $227 |
| Estimated bill | $2,182 | $2,041 |
Indiana also caps homestead property taxes at 1% of your home’s gross assessed value, so a $250,000 home can’t be taxed more than $2,500 before the credit. Changes to your assessed value or local tax rates will move these numbers, so treat this as a guide, not a forecast.
When Are Indiana Property Taxes Due?
Indiana property taxes are paid in two installments, due May 10 and November 10. When a due date falls on a weekend or holiday, it moves to the next business day. Late payments carry a penalty, so contact your county treasurer if you can’t pay on time.
If your taxes are paid through your mortgage escrow account, your lender pays these installments for you. Changes to your tax bill show up in your monthly payment at your next escrow review.
What Homeowners Should Do Now
- Confirm your homestead deduction is on file. This matters most if you bought, refinanced, or moved the home into a trust recently. To apply for a given year’s bill, file with your county auditor by January 15 of that year.
- Review your assessed value. If it looks high, you have the right to appeal.
- Watch local tax rate discussions. Cities, schools, and counties set the rates that drive your bill.
- Compare bills year to year. Make sure the standard deduction, supplemental deduction, and homestead credit all appear.
Frequently Asked Questions
Did the new law affect my 2026 property tax bill?
Yes. Bills payable in 2026 were the first to include the Supplemental Homestead Credit, worth 10% of your bill up to $300, and the supplemental deduction increased to 40%. The standard deduction phase-down begins with 2027 bills.
Do I need to apply for the homestead credit?
No. If your homestead deduction is on file with your county auditor, the credit is applied automatically.
When are Indiana property taxes due?
In two installments, due May 10 and November 10. If a due date falls on a weekend or holiday, it moves to the next business day.
Is the standard homestead deduction going away?
Yes, gradually. It drops from $48,000 on 2026 bills to $40,000 on 2027 bills and $30,000 on 2028 bills, and continues down to zero under current law. The supplemental deduction rises at the same time.
Why could my bill go up even with larger deductions?
Your bill also depends on your assessed value and local tax rates. If either one rises, your bill can increase even as deductions grow.
If you have questions about how these changes affect your home purchase, refinance, or monthly payment in Northwest Indiana, reach out and let’s talk it through. Call 219-695-0369 or text me at 219-758-8072.
This is part one of a two-part series. Read part two: Indiana Property Tax Relief for Veterans in 2026
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