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: Jan 27, 2022
BILL NUMBER: SB 236 BILL AMENDED: Jan 25, 2022
SUBJECT: Eligibility for Senior Property Tax Deduction.
FIRST AUTHOR: Sen. Holdman BILL STATUS: 2
nd
Reading - 1
st
House
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
$300,000 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.
Effective Date: July 1, 2022.
Explanation of State Expenditures:
Explanation of State Revenues:
Explanation of Local Expenditures:
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 $14.7 M to $21.8 M in combined property tax
shifts to other taxpayers and revenue losses to local units.
Deduction: By expanding the eligibility for the deduction, the bill will increase the number of over 65
property tax deductions by an estimated 42,500 to 63,000 annually, resulting in $596 M to $882 M in new
deductions. While the bill impacts property taxes beginning in 2024, it could take a couple years to reach the
SB 236 1 full impact as taxpayers who are currently ineligible become aware they are eligible for the deduction.
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