Indiana property tax caps limit the amount of property taxes to 1% of property values for homesteads (owner-occupied), 2% for other residential property and farmland, and 3% for all other property. The caps provide a dual benefit to taxpayers. All taxpayers benefit from the predictability the caps provide. In addition, taxpayers who would otherwise pay above the cap receive direct property tax relief in the form of a tax credit (known as a “circuit breaker credit”) that reduces the bill to the capped amount.
The amount of the credit for each property type is outlined below. The credit is the amount that exceeds the stated percentage.
1. Homestead exceeds 1%
2. Residential property exceeds 2%
3. Long-term care property exceeds 2%
4. Agricultural land exceeds 2%
5. Nonresidential property exceeds 3%
6. Business Personal Property exceeds 3%
Note: An individual real estate assessment may contain a variety of cap allocations.
Note: Property taxes imposed after being approved by the voters in a referendum or local public question shall not be considered for purposes of calculating a person’s credit. In other words, the voter-approved taxes are outside the property tax caps.
Note: A person does not need to file an application for the Property Tax Cap credit. It will automatically be applied to the property tax statement. This credit has nothing to do with the Homestead deduction. A taxpayer desiring to have a Homestead deduction must have an approved Homestead deduction on file in the Auditor’s office.
Residential Property- 2%
Long-Term Care- 2%
Agricultural Land- 2%
Nonresidential Property- 3%
Business Personal Property- 3%