LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6827 NOTE PREPARED: Dec 29, 2024
BILL NUMBER: HB 1293 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 transfer tax equal to 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. It also 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 excise tax on any excess single family residences.
Effective Date: July 1, 2025.
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 imposed 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 from the fund.
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
HB 1293 1 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 Excess Single Family Residential Property Holdings by Certain
Entities: Beginning in FY 2026, the bill establishes a tax on single family residences acquired by applicable
taxpayers after December 31, 2025. 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 owed 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 transfer 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 transfer 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 deposited in 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 1293 2