LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6563 NOTE PREPARED: Dec 12, 2024
BILL NUMBER: HB 1075 BILL AMENDED:
SUBJECT: Property Taxes.
FIRST AUTHOR: Rep. Haggard BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill has the following provisions:
Homestead AV Freeze: This bill provides that, for assessments beginning in 2026, the assessed value of
homestead property shall not be subject to annual adjustments (trending), but instead shall be determined (1)
based on the assessed value of the homestead on the January 1, 2025, assessment date, (2) the assessed value
of the homestead on the first assessment date that it becomes homestead property, if it was not a homestead
on the January 1, 2025, assessment date, or (3) the sales price or fair market value of the homestead, if there
is a change of ownership after January 1, 2025.
Partially Disabled Veteran Deduction Amount Change: This bill increases the amount of the assessed value
deduction for disabled veterans. It phases in the increase over five years from $24,960 under current law to
$50,000 for assessments beginning in 2030.
Over 65 Property Tax Credit: This bill provides for a five year phase in of a 100% property tax credit for
the property tax liability imposed on the homestead of an individual who is or will be at least 65 years of age
on or before December 31 of the calendar year immediately preceding the current calendar year in which the
individual's property taxes are first due and payable. It specifies, beginning with property taxes first due and
payable in 2026, the annual amounts of the phased in property tax credit for such an individual's homestead.
This bill makes conforming changes.
Effective Date: Upon passage; July 1, 2025.
Explanation of State Expenditures: Department of Local Government Finance (DLGF): This bill’s
provisions will result in a temporary increase in the administrative workload for the DLGF since the agency
would need to update any applicable guidance and rules pertaining to the assessment of homestead properties
and update the property tax deduction form for disabled veterans deductions to account for the updated
deduction amounts phased in over a five-year period.
HB 1075 1 Explanation of State Revenues:
Explanation of Local Expenditures: Homestead AV Freeze: This bill’s provisions will result in an increase
in the local assessing officials’ workload. The officials will need to perform further due diligence on
homestead eligible properties to verify that the calculated assessments for the homestead AV portion of the
properties adhere to the conditions established by the bill (i.e., at which point the homestead AV portion of
the property should be frozen or potentially unfrozen and subject again to a trending adjustment).
Partially Disabled Veteran Deduction Amount Change: This bill’s provisions may result in an increase in
the administrative workload for county auditors to the extent auditors will need to work in conjunction with
their respective property tax and billing software vendors to verify that the new deduction amounts are being
applied accurately to the applicable property tax records.
Explanation of Local Revenues: Homestead AV Freeze and Partially Disabled Veteran Deduction Amount
Change: The changes to freezing of the homestead AV and the amount of the partially disabled veteran
deduction will together result in changes in local revenue and in tax shifts between property types, starting
with property taxes payable in CY 2027. The estimated combined effect of these two provisions on net
property taxes by taxpayer class is summarized in the following table for CY 2027. These estimates assume
that property owners who were eligible to receive a standard homestead deduction and/or a partially disabled
veteran deduction for taxes payable in CY 2023 will continue to receive the applicable deduction(s) for taxes
payable in CY 2027. The estimates do not assume any changes or transfers of ownership in homestead
properties between CY 2023 and CY 2027.
Estimated Net Tax Change ($M)
Property Type CY 2027
Homesteads -199.0
Farmland 9.1
Other Residential 17.4
Apartments 7.5
Ag Business 3.6
Other Real 53.5
Personal Property 26.1
Total -81.8
The following table summarizes the estimated net property tax revenue change by taxing unit type.
HB 1075 2 Estimated Net Revenue Change ($M)
Unit Type CY 2027
Counties -19.9
Townships -3.6
Cities and Towns -26.9
School Corporations -43.5
Libraries -3.1
Special Units -9.3
TIF 24.5
Total -81.8
Total Without TIF -106.3
Over 65 Property Tax Credit: This bill’s provision will reduce local revenues by an estimated $240 M in CY
2026, $505 M in CY 2027, $789 M in CY 2028, $1.10 B in CY 2029, and $1.43 B in CY 2030 when fully
phased in. The revenue loss will continue to increase each year as the amount of taxes that would otherwise
be billed to qualifying senior homeowners increases. All local units and school corporations will have
reduced revenue under the bill.
Under this bill, beginning with taxes payable in CY 2026, qualifying senior homeowners will receive a credit
against their homestead property tax bill. The credit will equal the amount of calculated taxes, multiplied by
20% in CY 2026, 40% in CY 2027, 60% in CY 2028, 80% in CY 2029, and 100% in each year beginning
with CY 2030.
Additional Information: According to the Census Bureau, about 30.3% of Indiana’s owner-occupied homes
are owned by homeowners who are at least 65 years old. The estimated net tax on all homesteads is currently
estimated at $4.1 B in CY 2026, $4.3 B in CY 2027, and $4.5 B in CY 2028. Based on the estimated
homestead tenure and net homestead tax by county, total senior homeowner tax bills are estimated at $1.20
B in CY 2026, $1.26 B in CY 2027, and $1.32 B in CY 2028.
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Local assessing officials; County auditors; Local civil taxing units and school
corporations.
Information Sources: LSA Property Tax Database; U.S. Census Bureau - American Community Survey,
5-Year Estimates 2022.
Fiscal Analyst: James Johnson, 317-232-9869; Bob Sigalow, 317-232-9859.
HB 1075 3