Indiana lawmakers are considering changes to the state’s property tax system due to high assessments last spring that may result in high tax bills this year. The Association of Indiana Counties reported that assessed values increased by 15% from 2021 to 2022, compared to a 5% increase the year before. Legislators are proposing bills that range from mild tweaks to overhauls of the system, including eliminating annual market-based adjustments, providing a credit against property tax liability, freezing property taxes for certain homeowners and allowing local governments to recover lost revenue.

The Senate Tax and Fiscal Policy Committee held a hearing last week on SB 46, authored by Sen. Jack Sandlin (R-Indianapolis), which provides for a county option circuit-breaker tax credit for qualifying homeowners. The bill allows a county to designate via ordinance applicable income thresholds and geographical areas to be eligible for the credit. The Legislature has acted on similar bills in previous sessions citing gentrification as the problem that is being targeted. The committee received testimony on SB 46, but a vote was held for another hearing date.

The chair and vice chair of the House Ways and Means Committee have authored and introduced HB 1499. The bill proposes to temporarily change the property tax cap for homesteads and provides a temporary supplemental homestead credit. The legislation would set property tax caps at 0.9% for property taxes payable in 2024 and gradually increase the cap to 1% for taxes payable in 2028. Further, a supplemental homestead credit is offered for $100 in 2024 and phases out in $25 increments until 2028. Remarkably, the legislation does not violate the property tax caps as amended into the Indiana Constitution because Article 10 states that property tax liability “may not exceed” the 1-2-3% caps. The Constitution clearly enables the Legislature to establish lower caps. The Legislative Service Agency’s fiscal note estimates the tax relief at $357 million in 2024.

Other property tax legislation introduced this session provides credits or exemptions for specific property owners or establishes a cap on assessed valuation growth. Importantly, three bills (SB 281, HB 1430, and HB 1618) have been introduced, which deal with business personal property. Senate Bill 281 and HB 1430 both increase the exemption from $80,000 to $250,000, but HB 1618 totally exempts business personal property purchased after December 31, 2023.

Below is a list of introduced bills that deal with property tax:

HB 1051 – Property tax relief

HB 1082 – Assessment procedures

HB 1309 – Property tax exemption for disabled veterans

HB 1369 – Property tax assessment appeals

HB1385 – Property tax exemption for qualified veterans

HB 1412 – Property tax assessment appeals

HB 1413 – Property tax increase limits

HB 1430 – Business personal property tax exemption

HB 1441 – Property tax assessments

HB 1499 – Taxation of homestead property

HB 1618 – Exemption for new business personal property

SB 29 – Disabled veterans

SB 45 – Elimination of annual adjustments to assessed values

SB 46 – County option circuit-breaker tax credit

SB 90 – Property tax freeze for seniors

SB 189 – Assessed value growth cap

SB 281 – Business personal property tax exemption

SB 306 – Homestead property tax liability cap

SB 323 – Renter’s property tax refund

SB 325 – Homestead standard deduction

SB 339 – Attainable homeownership tax credit

SB 355 – Property tax matters

SB 454 – Eligibility for senior property tax deduction

David Ober is the Indiana Chamber’s vice president of taxation and public finance. Ober, a native of Noble County, started with the Chamber in June 2022 and is a former state legislator and commissioner for the Indiana Utility Regulatory Commission.