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 6668 NOTE PREPARED: Dec 27, 2023
BILL NUMBER: HB 1176 BILL AMENDED:
SUBJECT: Investor Ownership of Single Family Residences.
FIRST AUTHOR: Rep. Harris BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State
XDEDICATED
FEDERAL
Summary of Legislation: This bill establishes the Housing Down Payment Assistance Fund. It establishes
a tax of 50% of the fair market value of a single family residence for each single family residence acquired
by an applicable taxpayer after the applicable date. The bill establishes a maximum number of single family
residences that may be owned by an applicable taxpayer after the applicable date for purposes of calculating
an annual tax on any excess single family residences.
Effective Date: July 1, 2024.
Explanation of State Expenditures: Housing Down Payment Assistance Fund: This bill establishes the
Housing Down Payment Assistance Fund, which will be used for the purpose of providing down payment
assistance to buyers purchasing single family residences. The fund will consist of payments received for
taxes assessed and any reporting penalties related to the tax on single family residences owned by applicable
taxpayers, which is also established by the bill. The fund will also consist of any federal funds received for
the purpose of providing down payment assistance to buyers purchasing single family residences. The
Indiana Housing and Community Development Authority will administer the fund, and expenses of
administering the fund will be paid from money in the fund. Additionally, money in the fund at the end of
a state fiscal year does not revert to the state General Fund.
Indiana Housing and Community Development Authority (IHCDA): The bill will increase the administrative
workload of the IHCDA since the agency will be required to administer the fund established by the bill and
adopt rules necessary to establish eligibility requirements and protocols for awarding assistance to
individuals seeking to purchase a single family residence. The bill requires these administrative expenditures
to be paid for from the fund.
HB 1176 1 Department of State Revenue (DOR): The DOR will experience an increase in administrative workload in
order to implement the provisions in the bill related to the tax on single family residences owned by
applicable taxpayers. The bill defines an applicable taxpayer as an entity that 1) manages funds pooled from
investors; and (2) is a fiduciary with respect to these investors. The DOR will need to establish reporting
requirements for the applicable taxpayers regarding their ownership of any single family residences, as well
as the form that these taxpayers will use to calculate their taxes owed on those properties. The DOR will also
be tasked with collecting any penalties associated with the applicable taxpayers failing to report the required
information to the DOR.
Explanation of State Revenues: Taxes on Single Family Residences Owned by Hedge Funds: Beginning
for taxes payable in 2025, the bill establishes a tax on single family residences owned by applicable
taxpayers. The tax for each single family residence acquired by an applicable taxpayer after the applicable
date is an amount equal to 50% of the fair market value of the single family residence. The bill also
establishes a graduated schedule for the maximum permissible level of units that can be owned by the
applicable taxpayers and a formula for calculating the amount of tax owned by the taxpayer should the
number of units exceed the maximum during a particular year on the schedule. The amount of revenue
anticipated to be generated by this new tax is not readily determinable since the property assessment and
property tax data provided by the counties do not clearly denote hedge fund ownership. Any revenue
generated from this tax will be contingent upon the number of applicable taxpayers and the number of single
family residences that they may own. Revenue from this tax will be deposited in the Housing Down Payment
Assistance Fund.
Reporting Penalty: The bill also establishes a penalty for the applicable taxpayers that fail to meet the
reporting requirements for ownership of single family residences, which are to be specified by the DOR. A
penalty in the amount of $20,000 is to be assessed against the applicable taxpayer and paid to the DOR. Any
penalty revenue collected is to be transferred to the Housing Down Payment Assistance Fund.
Explanation of Local Expenditures:
Explanation of Local Revenues:
State Agencies Affected: Indiana Housing and Community Development Authority; Department of State
Revenue.
Local Agencies Affected:
Information Sources:
Fiscal Analyst: James Johnson, 317-232-9869.
HB 1176 2