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

If you own a home in Indiana, the property tax bill that matters most is the one payable in 2026. The new property tax law was signed in 2025, yet it does not affect bills due in 2025. County budgets for that year were already set. The relief begins showing up in 2026.

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

When do the Indiana property tax changes start?

The changes apply to property taxes payable in 2026 and later.

• Property tax bills due in 2025 stay the same.
• Property tax bills payable in 2026 reflect the new credits and deductions.

What is the new 10 percent homestead credit?

Starting in 2026, homeowners with a homestead receive a credit equal to 10 percent of their property tax bill, capped at $300. This credit reduces the bill directly after other deductions are applied.

Here is what that looks like.

• $2,000 tax bill equals a $200 credit.
• $3,500 tax bill equals a $300 credit due to the cap.

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

Who should double-check their homestead status?

You should verify your homestead deduction if you bought a home in 2025, refinanced, changed ownership, or transferred the property into a trust. If the homestead deduction is missing, the credit often does not appear.

How are property tax deductions changing over time?

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

Standard homestead deduction schedule

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

Supplemental homestead deduction schedule

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

Simple takeaway. Over time, a larger share of your home’s value is protected from property taxes, while the flat deduction gradually disappears.

What this means for Northwest Indiana homeowners

Most homeowners in Northwest Indiana should see some level of relief in 2026. Homes with higher assessed values often see larger dollar savings because percentage-based deductions scale with value.

Lower-valued homes should review the numbers carefully as the flat deduction shrinks. Local tax rates can also increase as cities and towns adjust to lower taxable values.

Example. $250,000 home in Northwest Indiana

This simplified example shows how the changes can affect a typical homestead.

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

2026 payable year estimate

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

The credit is easy to spot because it reduces the bill directly.

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. These options help homeowners manage cash flow during difficult years.

Rules vary by county. Your county auditor can confirm eligibility and availability.

What homeowners should do now

• Confirm your homestead deduction is on file.
• Review your assessed value for accuracy.
• Pay attention to discussions about local tax rates.
• Review your 2026 bill carefully when it arrives.

Frequently asked questions

Will my 2025 property tax bill change?

No. The changes begin with bills payable in 2026.

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

Most homeowners do not. The credit applies automatically if your homestead deduction is filed.

Why could tax rates increase?

Local governments still need the same revenue to fund services. When deductions reduce taxable value, rates may adjust.

What if I bought a home in 2025?

Verify your homestead deduction is filed correctly with the county.

Next step

If you want help reviewing how property taxes affect your monthly payment or future buying power, contact us here.

 

Click here to view part 2 of the series:

Indiana Property Tax Relief for Veterans in 2026