Does Florida Have Property Taxes? (2026 Tax Guide)
Does Indiana Have Property Taxes?
Yes, Indiana does have property taxes, but they are consistently ranked as some of the most homeowner-friendly in the Midwest. While property taxes are the primary source of funding for local school districts, police departments, and county infrastructure, Indiana is one of the few states to have strict "tax caps" written directly into its state constitution. This ensures that your tax bill remains a predictable percentage of your home's value, regardless of local government spending.
As we move through 2026, Indiana is implementing its most significant property tax overhaul in over a decade. Under the newly enacted Senate Enrolled Act 1, homeowners are seeing a fresh wave of automatic credits and a structural shift in how homestead deductions are calculated. For anyone buying a home in 2026, these changes make the "Hoosier State" an even more attractive destination for long-term financial stability.
To help you prepare for the 2026 tax year, here are four key factors shaping Indiana property taxes today.
1. The 1% Constitutional Tax Cap
The gold standard of Indiana’s tax system is the "Circuit Breaker" cap. By law, the property tax on a primary residence (homestead) cannot exceed 1% of the home's gross assessed value. This means if your home is valued at $300,000, your total property tax bill is constitutionally capped at $3,000 per year, before any other deductions are even applied.
As confirmed by the Indiana Department of Local Government Finance, this 1% cap provides a level of protection that few other states can match. While school referendums can occasionally sit outside this cap, the "1-2-3" rule (1% for homesteads, 2% for rental/agricultural, and 3% for business) remains the bedrock of Indiana's buyer-friendly reputation in 2026.
2. The New 2026 Supplemental Homestead Credit
A major development for 2026 is the launch of an automatic 10% property tax credit for all qualifying homesteads. This credit, introduced through recent legislative reform, applies directly to your final tax liability. For the 2026 tax year, homeowners will see an automatic reduction of 10% on their bill, up to a maximum credit of $300.
This "bonus" credit is designed to offset the rising cost of living and is applied automatically to any property already receiving the standard homestead deduction. For buyers in 2026, this immediate "discount" provides a welcome cushion during the first year of homeownership, as noted in the 2026 Legislative Update.
3. Shifting 2026 Deduction Thresholds
Indiana is currently in the middle of a multi-year transition regarding how it "discounts" your home's value before taxes are calculated. For 2026, the Standard Homestead Deduction is set at $48,000. This amount is subtracted from your home's value immediately. After that, a "Supplemental Deduction" is applied to the remaining balance.
In 2026, the supplemental deduction has increased to 40% of the remaining value. This shift toward a higher percentage-based deduction is part of a plan that will eventually see 66.7% of a home's value shielded from taxes by 2031. This "phasing-in" of relief ensures that as Indiana's housing market continues to grow, your taxable value remains suppressed compared to the actual market price.
4. 2026 Senior and Disability Credit Upgrades
Indiana has upgraded its protections for residents on fixed incomes for the 2026 tax year. The state has officially transitioned several old "deductions" into "credits," which provide a more powerful dollar-for-dollar reduction of your tax bill. For seniors (65+), the income limit to qualify for the $150 Over-65 Credit has been raised to $60,000 for individuals and $70,000 for joint filers.
Additionally, blind or disabled homeowners now qualify for an automatic $125 credit with no income testing required, provided they provide medical verification to their county auditor. These 2026 updates, highlighted by the 2026 Monroe County Auditor Guide, are designed to ensure that long-term residents can remain in their homes even as neighborhood values rise.
Is Indiana a Low Property Tax State?
Without question, Indiana remains one of the most affordable states in the nation for property taxes. Between the 1% constitutional cap, the new 10% automatic credit for 2026, and the absence of a state-level property tax, the cost of ownership is incredibly low. For those looking to move in 2026, the key is to ensure you file your homestead application by the **January 15th** deadline to trigger these massive savings. With the right planning, Indiana offers a stable, predictable, and highly affordable environment for any homeowner.
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