Hoosier Property Tax Overhaul Takes Effect for 2026
INDIANAPOLIS — As Hoosiers ring in the new year, an overhaul of the state’s property tax system is officially taking effect, promising over $1.3 billion in savings for property owners over the next three years.
Senate Enrolled Act 1 (SEA 1), a top priority for the 2025 legislative session, aims to protect families from the sting of rising home values and inflation. State Representative Becky Cash of Zionsville says the law is a direct response to the financial anxiety many residents have voiced.
“I’ve talked with many families who have been worried about high property tax bills and tighter budgets,” Rep. Cash said. “This new law helps Hoosiers stay in their homes and continue building their future here in Indiana.”
The relief package is designed to provide both immediate and long-term support:
10% Instant Credit: Starting in 2026, homesteads will receive a property tax credit of 10% (up to $300) off their total bill.
The “Two-Thirds” Deduction: The law begins phasing in a massive increase to the supplemental homestead deduction. By 2031, homeowners will be able to deduct two-thirds of their home’s assessed value from their taxable total.
Senior Security: The act includes additional credits for seniors on fixed incomes, ensuring they see savings even if their property has already reached the state’s constitutional tax caps.
The legislation isn’t just about cutting checks; it also targets the “hidden” ways taxes can climb. Under SEA 1, property tax referenda—which often fund major school or local projects—must now appear on General Election ballots to ensure the highest possible voter turnout.
Additionally, the state has launched a new Property Tax Transparency Portal. This online tool allows taxpayers to see exactly how proposed local spending changes could impact their personal bills before they go to a vote.
State Representative Danny Lopez of Carmel noted that while the law puts money back into pockets, it also forces local governments to be more disciplined.
“SEA 1 was a way to reform taxation and make it simpler at the local level,” Rep. Lopez said. “It’s going to require local governments to make some difficult decisions, but it’s also giving them new tools for them to be able to make new investments in amenities and quality of life.”
Hoosiers can begin seeing the effects of these changes on their 2026 property tax statements. For more details on the specific credits and the new transparency portal, residents are encouraged to visit the official Indiana General Assembly website at iga.in.gov.
