Homestead property tax freeze.
The bill's impact on state laws is notable as it establishes a new chapter in the Indiana Code concerning property tax liability specifically for homesteads. By freezing property tax liabilities, it aims to provide economic relief to homeowners, particularly in times of rising property values and tax assessments. This could potentially stabilize the housing market by making it more affordable for homeowners to maintain their properties without the fear of exorbitant tax increases. Additionally, this law could shift some burden of property taxes from individuals to other forms of taxation, as local governments may need to adjust to lost revenue from these taxes.
House Bill 1028 introduces a significant change to the property tax structure in Indiana by implementing a homestead property tax freeze. Under this bill, property tax liability for individuals will be frozen based on the date they acquired their homestead. This means that homeowners will not face increased property tax rates beyond the amount that was due in the calendar year they took ownership, effectively protecting them from rising taxes associated with increases in property value. The legislation is set to take effect on July 1, 2025, and will apply to property taxes due starting in the 2026 calendar year.
Despite its potential benefits, there are points of contention surrounding HB 1028. Critics may argue that freezing property taxes could limit revenue for local governments, affecting their ability to fund essential services and infrastructure. Additionally, opponents may raise concerns about the fairness of benefitting homeowners who might have purchased their property at different times, thereby creating inequality among residents regarding property tax responsibilities. The bill's parameters regarding qualified interests and assessment changes also invite scrutiny about how equitable these measures will be in practice.