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The homestead deduction is Indiana’s main property tax break for people who own and live in their home. It’s changing. A 2025 law is phasing the standard deduction down to zero while the supplemental deduction and a new homestead credit grow [2][3]. You apply once, with your county auditor [1].
At a glance
- Standard deduction, 2027 bills
- $40,000 [2]
- Supplemental deduction, 2027 bills
- 46% of the remaining value [2]
- Supplemental homestead credit
- 10% of the homestead's tax, up to $300 [3]
- Over 65 Credit
- $150 [5]
- Where and when to apply
- County auditor, by January 15 [1]
How the homestead deduction works
A deduction lowers the assessed value your tax is figured on. A credit comes straight off the bill [1]. Indiana homeowners with a homestead get several of each.
To qualify, the home has to be your principal place of residence: your true, fixed, permanent home that you intend to come back to after time away. A 2026 law moved that definition into the Indiana Code [2].
The standard deduction is phasing down
| Assessment date | Standard deduction |
|---|---|
| Before 2025 assessments | Lesser of 60% of assessed value or $48,000 |
| 2025 assessment (taxes paid in 2026) | $48,000 |
| 2026 assessment (taxes paid in 2027) | $40,000 |
| 2027 assessment (taxes paid in 2028) | $30,000 |
| 2028 assessment (taxes paid in 2029) | $20,000 |
| 2029 assessment (taxes paid in 2030) | $10,000 |
| 2030 assessment and later | $0 |
The supplemental deduction is growing
After the standard deduction comes off, the supplemental homestead deduction takes a percentage off the remaining assessed value [2]:
| Tax bills due | Share of remaining assessed value deducted |
|---|---|
| Taxes paid in 2026 | 40% |
| Taxes paid in 2027 | 46% |
| Taxes paid in 2028 | 52% |
| Taxes paid in 2029 | 57% |
| Taxes paid in 2030 | 62% |
| Taxes paid in 2031 and later | 66.7% |
The new supplemental homestead credit
Under the 2025 law, anyone who qualifies for the homestead deduction also gets the supplemental homestead credit. It’s the lesser of 10% of the tax on the homestead or $300 [3]. The county auditor identifies eligible homes and applies it [3].
Help for homeowners 65 and older
Over 65 Credit. A $150 credit for owners at least 65 who meet income limits and have owned the property for at least a year [5]. Starting with 2026 Pay 2027 bills, you also have to live on the property, though time in a hospital or nursing home doesn’t count against you [2]. If co-owners aren’t all 65, the credit is reduced [5].
Over 65 Circuit Breaker Credit. For owners 65 and older with a homestead, this credit keeps the tax bill from rising more than 2% over the year before [5]. Income limits rise each year with the Social Security cost-of-living adjustment [4]:
| Tax bills due | Single filer | Married, filing jointly |
|---|---|---|
| 2026 | $60,000 | $70,000 |
| 2027 | $61,680 | $71,960 |
Veterans and other credits
A 2026 law reworked the veterans’ benefits, starting with 2026 Pay 2027 bills [2]:
- Totally disabled veterans: a deduction of 100% of the home’s assessed value, for veterans who have lived in Indiana at least a year. People who had the old deduction must file a new application to get it.
- Veterans 62 or older with a disability of at least 10%: a $250 credit.
- Veterans with a service-connected disability of at least 10%: a $350 credit.
There’s also a Blind/Disabled Credit, with its own application form [1]. Ask your county auditor for the current amount.
How to apply
- Get the form from your county auditor or the Department of Local Government Finance. There are separate forms for the homestead deduction, the Over 65 credits, disabled veterans and the Blind/Disabled Credit [1].
- File with the auditor of the county where the home is [1].
- Meet the January 15 deadline. An application filed on or before January 15 applies to the bill due that year. For example, filing by January 15, 2026 counted for 2025 Pay 2026 bills [1].
- You don’t reapply every year. Benefits carry over unless the property is sold or the title changes [1].
For questions about your own eligibility, the state says your county auditor is the best contact [1].
Sources
- Indiana Department of Local Government Finance: Deductions and credits
- DLGF memo: Legislation Affecting Deductions, Credits, and Exemptions (May 27, 2026)
- DLGF: Legislative update FAQ (June 2025)
- DLGF memo: Over 65 Circuit Breaker Income Threshold Calculation for Pay 2027 (April 20, 2026)
- Monroe County Auditor: Over 65 credits
Common questions
How much is the homestead deduction in Indiana for 2027 tax bills?
The standard deduction is $40,000 for the 2026 assessment date, which is billed in 2027. The supplemental homestead deduction then takes 46% off the remaining assessed value. The standard deduction keeps dropping, to $0 by the 2030 assessment, while the supplemental percentage rises to 66.7%.
What is the deadline to file for the homestead deduction in Indiana?
File with your county auditor by January 15 to have the deduction apply to the tax bill due that year. For example, an application filed by January 15, 2026 applied to 2025 Pay 2026 bills. You don't have to reapply each year unless the property is sold or the title changes.
What property tax help is there for Indiana seniors?
The Over 65 Credit is $150, and the Over 65 Circuit Breaker Credit keeps the tax bill on your homestead from rising more than 2% a year. For 2027 tax bills, the circuit breaker income limits are $61,680 for single filers and $71,960 for married couples filing jointly. Apply with your county auditor.