Assessor’s Office

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. 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.

IC 6-1.1-12-37

Homestead 1% Cap (must have a homestead application on file in the Auditor’s office)

• It consists of a dwelling, garage and 1 acre of land
• Decks, Patios and Gazebos used residentially
• One additional building used for residential purposes
• One additional residential yard structure
• All geothermal and solar yard items that supply to the dwelling

Residential Property 2% Cap

• Single-family dwelling and one acre of land that is not part of a homestead
• All yard items, residential and agricultural, that are used residentially but not part of the homestead
• Excess Residential land
• A building that includes 2 or more dwelling units (including apartment buildings)
• Any common area shared by the dwelling units, including land that is a common area
• Land on which the building is located
• Land rented or leased for the placement of a manufactured or mobile home including common area shared by the manufactured or mobile homes

Long-Term Care- 2% Cap

• • Used for the long-term care of an impaired individual
  • Health facility licensed under Indiana Code, or housing allowed to use the term “assisted living”
  • Independent-living home that, under contractual agreement, serves not more than 8 individuals

Agricultural Land- 2% Cap

• • Land assessed as agricultural land under the real property assessment rules and guidelines of the Department of Local Government Finance

Nonresidential Property- 3% Cap

• • Real property  that is not a homestead, or residential property
  • Commercial land and improvements  not considered Residential Property
  • Agricultural Improvements

Business Personal Property- 3% Cap