LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6506 NOTE PREPARED: Dec 15, 2021
BILL NUMBER: SB 236 BILL AMENDED:
SUBJECT: Eligibility for Senior Property Tax Deduction.
FIRST AUTHOR: Sen. Qaddoura BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: GENERAL IMPACT: Local
DEDICATED
FEDERAL
Summary of Legislation: This bill increases the adjusted gross income threshold for an individual at least
65 years of age to obtain a deduction from the assessed value of the individual's real property from $30,000
to $40,000. It also increases the threshold for an individual at least 65 years of age filing a joint return from
$40,000 to $50,000. The bill increases the maximum assessed value of the real property from $200,000 to
$400,000 to be eligible for the deduction. It also provides that an individual is not entitled to a refund for the
deduction for any previous year in which the assessed value of the individual's real property would have
qualified for the deduction for that year due to a subsequent increase in the assessed value threshold. The bill
provides that an individual must apply for the deduction each year.
Effective Date: July 1, 2022.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures: The bill’s requirement that taxpayers file an application for the 65 or
older deduction each year could increase the workload of county auditors’ offices, and may require additional
staff and resources in some counties.
Explanation of Local Revenues: Summary - Beginning with taxes payable in 2024, the expansion of the
over 65 property tax deduction will result in an estimated $17.8 M to $26.8 M in combined property tax
shifts to other taxpayers and revenue losses to local units.
SB 236 1 Deduction: By expanding the eligibility for the deduction, the bill will increase the number of over 65
property tax deductions by an estimated 51,600 to 77,400 annually, resulting in $723 M to $1.08 B in new
deductions. While the bill impacts property taxes beginning in 2024, it could take a couple years to reach the
full impact as taxpayers who are currently ineligible become aware they are eligible for the deduction. The
bill’s requirement that taxpayers file an application for the deduction annually could decrease the number
of homesteads receiving the deduction, although it would still likely be within the estimated range.
Additional Information - In 2021, nearly 102,000 homesteads received the over 65 deduction, which reduces
net AV by $14,000. Under current law, taxpayers only apply for the deduction once, and as long as the
taxpayer’s gross AV remains below $200,000, the taxpayer will automatically receive the deduction the next
year. If the gross AV increases above $200,000, the taxpayer will continue to receive the deduction as long
as the increase was not attributable to physical improvements to the property. If the taxpayer’s income grows
to exceed $30,000 (single) or $40,000 (married), the taxpayer is responsible to alert the county auditor that
they are no longer eligible for the deduction.
State Agencies Affected:
Local Agencies Affected: Local civil taxing units and school corporations; county auditors.
Information Sources: LSA property tax database.
Fiscal Analyst: Austin Spears, 317-234-9454.
SB 236 2