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Lawmakers begin debating property tax relief, though help unlikely this year

Homes

Over the last decade, the statewide average home value increase was less than 5 percent a year. This year, it looks to be about 16 percent. (Joey Mendolia WFIU/WTIU)

Indiana lawmakers are exploring ways to help Hoosiers dealing with big increases in property taxes. But the legislation discussed in a House committee Thursday won’t affect this year’s tax bills at all.

Home values are skyrocketing. Over the last decade, the statewide average increase was less than 5 percent a year. This year, it looks to be about 16 percent.

Property taxes are currently capped for homeowners at one percent of their assessed value. Rep. Jeff Thompson’s (R-Lizton) bill, HB 1499, would lower that to 0.9 percent in 2024, 0.925 percent in 2025, 0.95 percent in 2026 and 0.975 percent in 2027.

It also creates an additional homestead tax credit – $100 in 2024, going down by $25 a year after that.

But Thompson acknowledged none of that would help people with the tax bills they’ll pay this year.

“We’re too close and that water’s under the bridge,” Thompson said.

Join the conversation and sign up for the Indiana Two-Way. Text "Indiana" to 73224. Your comments and questions in response to our weekly text help us find the answers you need on statewide issues throughout the legislative session. And follow along with our bill tracker.

While homeowners would be helped, local governments and schools would take a big hit – a loss of more than $350 million in 2024 alone. Thompson suggested it's not a decrease in revenue, it's just less of an increase.

He pointed out that many local governments will see double the typical increase in revenue this year, making the reduced revenue next year less painful.

But local government leaders said governments are under significant pressure from inflation. The increased revenue from this year's property taxes is helping balance out the increased costs they face.

“This would be a great curveball in '24, '25 and '26 that would be difficult for a city that’s not in a super-growth pattern yet to overcome,” said Muncie Mayor Dan Ridenour.

Thompson said he’ll continue working on potential solutions this legislative session.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

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