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Farmland owners underwhelmed by property tax relief bill

By Clayton Baumgarth

Posted April 11, 2025

Stock image of a corn field and blue sky

(Pixabay)

The Indiana House passed a bill Thursday seeking to lower property taxes for homeowners and farmland owners.

Senate Bill 1 provides $1.4 billion in property tax relief for homeowners over the next three years. Farmland owners save roughly $140 million over the same period.

In a video on Facebook, State Rep. Kendell Culp (R-Rensselaer) said that he had hoped farmland owners would get a larger tax break.

“Now that’s only 10 percent of what the homeowners will receive, but at least it’s moving in the right direction,” Culp said.

Lawmakers changed the capitalization rate in the farmland formula from eight to nine percent. There is also a one-third deduction of the assessed value of farmland.

Todd Kuethe, a farmland economics professor at Purdue, said further changes to tax rates of different property types could lead to different land use implications.

“For example, if the reductions become favorable to one type of land use over the other, there'll be some people on the margin that'll make land use decisions because of that,” he said.

The bill now heads back to the Indiana Senate for final approval.