Indiana Implements Landmark Property Tax Relief Law Capping Residential Growth at 3%

INDIANAPOLIS, IN — The Indiana Department of Local Government Finance (DLGF) issued administrative compliance guidance to all 92 county assessors, implementing statutory property tax relief caps under House Bill 1042 for the 2027 tax assessment year.

Shielding Homeowners and Farmers from Appraisal Inflation

The landmark legislation establishes an enforceable 3% maximum annual growth cap on residential homestead property tax bills, decoupling homeowner tax obligations from rapid real estate market appraisal inflation. The statute also establishes permanent agricultural base rate protections, preventing prime farmland from being assessed at inflated industrial or commercial development valuations unless formal rezoning occurs.

Legislative leaders stated that hardworking Hoosiers who have lived in their homes for decades should never be taxed out of their neighborhoods due to market speculation.

Association of Counties and Taxpayer Watchdogs Support

The Association of Indiana Counties worked with state fiscal analysts to establish baseline replacement funding for local emergency services.

Hoosier taxpayer federations celebrated the enactment of predictable, hard statutory property tax caps.

Assessment Year Implementation

County assessors will apply the 3% property tax growth caps to all certified tax billing statements issued starting January 1, 2027.