Indiana Property Tax Changes in 2026: What Homeowners Need to Know

Quick Summary: Indiana is changing how property taxes are calculated, starting with bills payable in 2027. Most homeowners will see a new 10 percent homestead credit up to $300 and gradual changes to deductions through 2031. How much you save depends on your home value, location, and whether your homestead status is filed correctly with your county.

Indiana pays property taxes in arrears, so your 2026 property tax bill reflects the 2025 values and rates. The new law changes how 2026 property taxes are calculated, and those changes first show up on bills payable in 2027. Your 2026 bill, which you paid this spring, was not affected.

This guide explains what is changing, how it affects homeowners in Northwest Indiana, and what steps you should take now.

When Do the Indiana Property Tax Changes Take Effect?

The new law applies to 2026 property taxes, which are payable in 2027. Here is how to think about the timeline:

• Property tax bills payable in 2026 (covering 2025 taxes) are not affected.
• Property tax bills payable in 2027 (covering 2026 taxes) reflect the new credits and deductions for the first time.

If you are looking at a bill you received this spring, the new law did not change it. The first time you will see these changes is on your 2027 bill.

What Is the New 10 Percent Homestead Credit?

Starting with the 2027 bill, homeowners with a homestead on file receive a credit equal to 10 percent of their property tax bill, capped at $300. This credit is applied directly to your final bill after all other deductions have already been calculated.

Here is what that looks like in practice:

• A $2,000 tax bill gets a $200 credit, bringing it to $1,800.
• A $3,500 tax bill gets a $300 credit due to the cap, bringing it to $3,200.

Most homeowners do not need to apply for this credit. If your homestead deduction is already on file with your county auditor, the credit is applied automatically.

Who Should Double-Check Their Homestead Status?

You should verify your homestead deduction is on file if you bought a home in 2025 or 2026, refinanced recently, changed ownership for any reason, or transferred the property into a trust. If the homestead deduction is missing from your record, the credit will not appear on your bill.

How Are Property Tax Deductions Changing Over Time?

The new law gradually shifts property tax relief away from a flat dollar deduction and toward a larger percentage-based deduction. This transition happens over several years and runs through 2031.

Standard Homestead Deduction Schedule

• 2027 payable year (2026 taxes): $48,000
• 2028 payable year (2027 taxes): $42,000
• 2029 payable year (2028 taxes): $30,000
• 2030 payable year (2029 taxes): $18,000
• 2031 payable year (2030 taxes): $6,000
• 2032 payable year (2031 taxes): $0

Supplemental Homestead Deduction Schedule

• 2027 payable year (2026 taxes): 40 percent
• 2028 payable year (2027 taxes): 46 percent
• 2029 payable year (2028 taxes): 53 percent
• 2030 payable year (2029 taxes): 60 percent
• 2031 payable year (2030 taxes): 63.4 percent
• 2032 payable year (2031 taxes): 66.7 percent

The straightforward takeaway: over time, a larger share of your home’s assessed value is protected from property taxes through the percentage-based supplemental deduction, while the flat dollar deduction gradually phases out entirely.

What This Means for Northwest Indiana Homeowners

Most homeowners in Lake, Porter, LaPorte, Jasper, and Newton counties should see some level of relief when the 2027 bills arrive. Homes with higher assessed values often see larger dollar savings because the percentage-based supplemental deduction scales with value.

If you own a lower-valued home, pay attention as the flat deduction shrinks over time. The supplemental deduction may not fully offset the loss of the standard deduction in the early years depending on your assessed value. Also keep an eye on local tax rate discussions, since cities and counties may adjust rates as taxable values change across the board.

How the Changes Affect a $250,000 Home in Northwest Indiana

This simplified example shows how the new structure affects a typical homestead for the first year the changes apply. Actual results will vary based on your county’s tax rate and your assessed value.

• Assessed value: $250,000
• Estimated local tax rate: 2.5 percent

2027 Payable Year Estimate (First Year of New Law)

• Assessed value: $250,000
• Standard deduction: $48,000
• Remaining value after standard deduction: $202,000
• Supplemental deduction at 40 percent: $80,800
• Taxable value: $121,200
• Estimated tax at 2.5 percent: $3,030
• Homestead credit (10 percent, capped at $300): $300
• Estimated final bill: $2,730

The homestead credit is easy to identify on your bill because it reduces the final amount directly after all deductions have been applied.

Are There Options for Seniors or Homeowners on Fixed Incomes?

The law preserves existing senior and disability programs and allows counties to offer property tax deferral options for homeowners who need help managing cash flow. Rules and eligibility vary by county. Contact your county auditor directly to find out what is available in your area.

What Homeowners Should Do Now

• Confirm your homestead deduction is on file with your county auditor.
• Review your assessed value for accuracy — if it seems high, you have the right to appeal.
• Pay attention to local discussions about tax rates in your city or town.
• When your 2027 bill arrives, review it carefully and compare it to previous years.

Frequently Asked Questions

Did the new law affect my 2026 property tax bill?

No. Indiana pays property taxes in arrears, so your 2026 bill covers 2025 taxes and was set before this law applied. The first bill affected by the new law is payable in 2027.

Do I need to apply for the $300 homestead credit?

Most homeowners do not. If your homestead deduction is already on file with the county auditor, the credit is applied automatically. You only need to act if your homestead status is missing or incorrect.

Why might local tax rates increase even though deductions are getting larger?

Local governments still need the same revenue to fund schools, roads, and public safety. When deductions reduce taxable values across a county, local rates may adjust upward to collect the needed revenue. Your individual bill reflects both your deductions and your local rate.

What if I bought a home in 2025 or 2026 and have not filed a homestead deduction?

File your homestead deduction with your county auditor as soon as possible. Without it, you will not receive the standard deduction, the supplemental deduction, or the new homestead credit. This is one of the most common and costly oversights for new homeowners in Northwest Indiana.

What is the difference between the homestead deduction and the homestead credit?

The homestead deduction reduces your assessed value before taxes are calculated. The new homestead credit is a separate reduction applied directly to your final tax bill after all deductions are already factored in. Both require your homestead status to be on file with the county auditor.

If you have questions about how these changes might affect your home purchase, refinance, or overall housing costs in Northwest Indiana, reach out and let’s talk through it.

This is part one of a two-part series. Read part two: Indiana Property Tax Relief for Veterans in 2026