Indiana proposal would limit covered homestead tax increases to 4%

A credit would limit covered homestead property tax liability to 104% of the prior year's liability after the prior year's credit. The credit covers people who received the standard homestead deduction for the same property in both the prior and current calendar years. A surviving spouse may qualify if their deceased spouse qualified for the deduction in the prior year. The calculation leaves out taxes from voter-approved referendums. The credit does not cover the part of a homestead used for a business that earns income. The chapter applies to property taxes first due and payable after December 31, 2026.

County auditors would identify eligible homesteads and apply the credit to their tax bills without an application from the owner. This applies to homestead property in the county that qualifies for the credit. The chapter applies to property taxes first due and payable after December 31, 2026.

Tax directly tied to a physical change that raises a home's assessment would be added to the liability calculated under the chapter. This applies when a physical change to a homestead raises its assessment. This applies to assessments after December 31, 2026, for property taxes first due and payable under the chapter.