Travis Bunn
Founder, AppealDesk · Published March 1, 2026
How Much Can Property Taxes Increase in Indiana? 2026 Complete Guide
Updated July 2026
Quick Answer
Indiana caps your tax bill, not your assessment. Under the constitutional circuit breaker, your total property tax bill cannot exceed 1% of your home's gross assessed value if it is your homestead, 2% for other residential and agricultural property, and 3% for commercial, industrial, and personal property. Any tax above the cap is automatically credited off the bill.
There is no limit on how much your assessed value can rise in a year, and voter-approved referendum levies sit outside the caps entirely. That combination is why Indiana bills still jump. Starting with bills payable in 2026, a new state law (Senate Enrolled Act 1) adds a homestead credit of 10% of your liability, up to $300.
Most homeowners never challenge their assessment, usually because nobody tells them they can or shows them how. That gap is the whole reason AppealDesk exists: see what your county has your home on record at, free, and if the number looks wrong we build the case for $49.
Indiana Property Tax Caps: The 1%, 2%, and 3% Constitutional Caps Explained
Indiana's property tax caps are written into the state constitution. Article 10, Section 1, ratified by voters in November 2010, limits what your total tax bill can be as a percentage of your property's gross assessed value. The caps were phased in through legislation beginning in 2008, but the protection became constitutional with the 2010 amendment, which is why lawmakers cannot quietly trim it in an ordinary budget session.
The three tiers are defined by how the property is used, not by who owns it or when it was bought. A homestead, meaning your primary dwelling plus up to one acre of surrounding land, is capped at 1% of gross assessed value. Other residential property and agricultural land are capped at 2%. Commercial, industrial, and personal property are capped at 3%. If your homestead sits on more than one acre, the extra acreage and any structures beyond the dwelling fall into the 2% tier, so a single parcel can carry two different caps at once.
| Property type | Cap on the bill | Max capped tax on $300,000 of assessed value |
|---|---|---|
| Homestead (dwelling plus up to one acre) | 1% of gross assessed value | $3,000 |
| Other residential and agricultural land | 2% of gross assessed value | $6,000 |
| Commercial, industrial, personal property | 3% of gross assessed value | $9,000 |
The arithmetic is deliberately simple. A homestead assessed at $300,000 cannot owe more than $3,000 in capped property taxes, no matter how high local tax rates climb. If the combined rates in your taxing district would otherwise produce a $3,600 bill, the extra $600 comes off automatically as a circuit breaker credit. You do not apply for it and you do not have to ask; it is applied by law when the county calculates the bill.
Two things the caps are not, and both get misreported constantly. First, they are not a limit on assessment growth. If your assessed value rises 15% in one year, the cap simply recalculates against the new, higher value, so the ceiling moves up right along with your assessment. Second, the cap does not reset when a home sells. Unlike California's acquisition-value system, Indiana has no protected base value that a new buyer loses. The cap is a fixed percentage of current assessed value for everyone, whether you closed last month or have owned the house for twenty years.
Do Property Taxes Go Up Every Year in Indiana?
They can, and in a rising market they usually do. Indiana adjusts assessments every single year through a process called annual adjustment, or trending. Your township or county assessing official updates your assessed value based on market value-in-use, using recent sales data for properties like yours. Nothing in Indiana law caps how much that number can move in a year. There is no 2% ceiling, no 3% ceiling, and no acquisition-value freeze of the kind homeowners moving here from other states expect.
Because the circuit breaker is a percentage of assessed value rather than a dollar figure, a higher assessment lifts the ceiling on your bill dollar for dollar. On a homestead, every $10,000 of additional assessed value raises the 1% cap by $100. If your bill was already sitting at or near the cap, an assessment increase passes straight through to what you pay, and the cap does nothing to soften it.
On the government side, growth is restrained separately. A local unit's operating levy can grow each year only up to the Maximum Levy Growth Quotient under Indiana Code 6-1.1-18.5, a figure tied to statewide income growth and capped by statute at 4%. That limits how much total revenue local units can raise, but it does not promise your individual bill stays flat, because your share of the levy depends on how your assessment moved relative to everyone else's in the district. If your neighborhood appreciated faster than the county as a whole, your slice of a flat levy grows.
Caps and rate limits only control how fast your bill can grow. Nothing in them checks whether the number underneath is right. Assessors in Indiana set values with mass-appraisal models that price thousands of homes at once, and nobody reviews yours unless you challenge it.
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Why Did My Indiana Property Taxes Go Up? Referendums and the Cap Loophole
If your bill came in above 1% of your gross assessed value and you are confident your home qualifies as a homestead, the most common explanation is a referendum. Voter-approved referendum levies, most often school operating or construction referendums, are exempt from the circuit breaker caps. When voters in your district approve one, that tax stacks on top of the capped amount, and your bill can legally exceed the 1% ceiling.
This is the single biggest source of confusion about Indiana's caps. Homeowners in districts with active referendums, including districts in the Evansville area where school referendum questions have drawn heavy attention, often see bills that look like they violate the constitutional limit. They do not. The referendum portion simply sits outside the cap by design, because the voters who approved it agreed to pay it. Your tax statement itemizes referendum levies separately, so you can see exactly how much of your bill escapes the cap and how much is capped tax.
The other routine drivers of a higher bill are the ones already covered: a higher assessment from annual trending, which raises the cap itself, and levy growth inside the Maximum Levy Growth Quotient. There is one more that catches people off guard. Losing a deduction, for example when a refinance, a title change, or a move into a trust disrupts your homestead filing, can spike a bill sharply, because it can push the parcel out of the 1% tier and into the 2% tier at the same time it removes the deduction.
2026 Indiana Property Tax Changes: Senate Enrolled Act 1
In April 2025, Governor Braun signed Senate Enrolled Act 1, the largest overhaul of Indiana property tax relief in more than a decade. Its centerpiece is a new homestead credit worth 10% of your property tax liability, capped at $300, which takes effect with taxes payable in 2026. The state has estimated that roughly two-thirds of Indiana homeowners will see a lower bill in 2026 than they paid in 2025. On a $2,000 liability, the 10% credit is worth $200; on a $4,000 liability, the credit hits the $300 ceiling.
SEA 1 layers targeted credits on top of that. Homeowners age 65 and older receive an additional $150 credit, and disabled veterans receive an additional $250, both beginning with taxes payable in 2026. These are credits against the bill, not deductions from assessed value, so they come off the bottom line directly.
The law also restructures Indiana's homestead deductions over a multi-year phase. For taxes payable in 2026, the supplemental homestead deduction expands to 40% of assessed value, and it grows in steps to 66.7% by payable-2031. Over the same period the older standard homestead deduction phases out entirely, disappearing by payable-2031. The net effect is a shift toward a single percentage-based deduction, which scales with value instead of holding a flat dollar amount that erodes as assessments rise. SEA 1 additionally reworked local income tax authority as the funding offset for this relief, and it modified how the Maximum Levy Growth Quotient is calculated for taxes due after December 31, 2026. The post-2026 levy formula has moving parts and the details are still being implemented, so check the Department of Local Government Finance's current guidance or your county auditor before relying on a specific future-year number.
Indiana Homestead Exemption and Deductions
Indiana's version of a homestead exemption is the homestead deduction, and claiming it matters twice over. It reduces the assessed value your taxes are computed on, and it is what places your property in the 1% circuit breaker tier rather than the 2% or 3% tier. The homestead covers your primary dwelling and up to one acre of land, which is why owners of larger parcels see part of the property treated differently from the house itself.
As described above, the deduction structure is in transition under SEA 1, with the supplemental homestead deduction expanding as a percentage of assessed value while the standard deduction phases out. Indiana also offers other deductions, including a long-standing set of programs for seniors, veterans, and homeowners with disabilities, though eligibility rules, income limits, and filing requirements vary and have been amended repeatedly. File through your county auditor's office, and confirm your homestead deduction is actually on record for the current year. A missing homestead filing is one of the most expensive paperwork errors an Indiana homeowner can make, because it costs you the deduction and the 1% cap in the same stroke.
At What Age Do Seniors Stop Paying Property Taxes in Indiana?
There is no age at which Indiana property taxes stop. What Indiana offers instead is age-based relief that reduces the bill. Beginning with taxes payable in 2026, homeowners 65 and older receive an extra $150 credit under SEA 1, on top of the general homestead credit of up to $300. Indiana has also long offered an over-65 deduction and an over-65 circuit breaker credit, both carrying income and assessed-value eligibility limits that the legislature adjusts from time to time. Verify the current thresholds with your county auditor before assuming you qualify, and file the paperwork; none of it is automatic. Seniors on fixed incomes still receive a tax statement every year. The relief lowers the number on it, it does not remove it.
What Is Indiana's Average Property Tax Rate in 2026?
Indiana does not have one property tax rate. Your rate is the sum of the levies of every taxing unit your parcel sits inside, including county, township, city or town, school corporation, library, and any special districts, divided by the district's net assessed value. Rates therefore vary widely from one taxing district to the next, sometimes between neighborhoods a mile apart, and published statewide averages age quickly. They will age faster than usual through 2026 and beyond, since SEA 1 is reshaping deductions and credits on a schedule that runs to 2031.
The more useful way to think about your ceiling is the circuit breaker itself. On a homestead, capped taxes cannot exceed 1% of gross assessed value, plus whatever referendum levies your district has approved. That gives you a hard upper bound you can compute yourself from the assessed value on your notice. For your actual district rate, look at your most recent tax statement, Form TS-1, which breaks out each unit's rate line by line, or pull the district rate reports the Department of Local Government Finance publishes each year.
- California2% a year
- Florida3% homestead
- Texas10% homestead
Indiana: Bill cap, 1%. That is a different kind of limit from the bars above, which cap the assessment itself.
The circuit breaker caps the tax owed at 1% of gross assessed value for a homestead. The value itself is not capped.
A cap limits how fast the number grows. It does not check whether the number was right to begin with.
What you can do about it
How to Appeal Your Indiana Assessment
Because the caps recalculate off your assessed value every year, the assessment is the number worth checking. If it is too high, everything downstream is too high with it, including the capped maximum that is supposed to protect you. An appeal is the only mechanism in Indiana that puts a human being on your individual property record.
The process starts with Form 130, the Taxpayer's Notice to Initiate an Appeal, filed with your township or county assessing official. The deadline depends on when your Form 11 assessment notice was mailed. If the notice went out before May 1, you must file by June 15 of the assessment year. If it was mailed after April 30, your deadline is June 15 of the following year, the year tax statements are mailed. One petition covers one parcel, so owners of multiple parcels file separately for each.
After you file, the process typically opens with an informal review by the assessor, where many disputes over square footage, condition, or an obviously wrong record get resolved without a hearing. If that does not settle it, your appeal goes to a hearing before the county Property Tax Assessment Board of Appeals, known as the PTABOA. If you disagree with the PTABOA's determination, you can appeal further to the Indiana Board of Tax Review. Evidence decides these hearings: comparable sales of similar properties, photographs and documentation of your home's condition, and anything that shows the assessor's record of your property does not match the property that actually exists.
A real AppealDesk order, Monroe County
In May 2026, a homeowner in Monroe County ran the check. The county had their home on record at $446,000, while recorded sales of comparable homes supported about $338,663: an over-assessment of $107,337, worth roughly $2,197 per year if corrected. Their packet laid out the comparable sales, the forms, and the filing steps. Nobody at the county was ever going to run that check for them.
Growth limits only help if the number they grow from is fair. If your assessment jumped after a purchase, new construction, or a revaluation, that new number is the one nobody has reviewed. Checking it is free and takes about a minute.
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Enter your address to pull your county record free. If it looks too high, your $49 packet gives you everything to challenge it.
Frequently Asked Questions
How much can my Indiana property taxes increase this year?
There is no fixed limit on the year-over-year increase. Your assessed value can rise as much as the market moved, and your bill rises with it up to the circuit breaker ceiling of 1% of gross assessed value for a homestead, plus any referendum levies, which sit outside the cap. Local levy growth is separately limited by the Maximum Levy Growth Quotient under IC 6-1.1-18.5, which carries a statutory ceiling of 4%.
Does the 1% cap reset when I buy a home in Indiana?
No. Indiana's circuit breaker is a fixed percentage of current gross assessed value, so there is nothing to reset. A new buyer gets exactly the same 1% homestead cap as a long-time owner once the homestead deduction is filed for the property. Indiana has no acquisition-value system and no protected base value that transfers with the deed or expires at closing.
Why is my bill more than 1% of my home's assessed value?
The usual reasons are a voter-approved referendum levy in your district, which is exempt from the caps; part of your property falling outside the homestead definition, since land beyond one acre sits in the 2% tier; or a missing homestead deduction filing, which moves the whole parcel into a higher tier. Your Form TS-1 tax statement itemizes each piece, and the referendum line is listed separately from capped tax.
Will my Indiana property taxes go down in 2026?
Many will. SEA 1's homestead credit of 10% of liability, up to $300, applies to taxes payable in 2026, with an additional $150 for homeowners 65 and older and $250 for disabled veterans. The state has projected that roughly two-thirds of homeowners will pay less in 2026 than in 2025. Whether your bill drops depends on your assessment, your district's levies, and any referendums your voters approved.
How do I appeal my property assessment in Indiana?
File Form 130 with your township or county assessing official by June 15 of the assessment year if your Form 11 notice was mailed before May 1, or by June 15 of the following year if it was mailed after April 30. The appeal moves through an informal assessor review, then a PTABOA hearing, with a further appeal available to the Indiana Board of Tax Review. File one petition per parcel, and confirm the current filing procedure with your county assessor, since counties differ on how they accept forms.
Related Resources
For a step-by-step walkthrough of the Form 130 process, see our guide on how to appeal property taxes in Indiana. If you are weighing whether a challenge makes financial sense, read is it worth appealing property taxes, and before your PTABOA hearing, review what evidence you need for an appeal.
This article provides general information about Indiana property tax laws as of July 2026. Tax laws change frequently, and local rules vary. Consult your county assessor or a tax professional for advice specific to your situation.