Indiana Homestead Exemption: Property Tax Relief Explained

Learn about the Indiana homestead excemption

Property taxes are an unfortunate fact of life for anyone who wishes to own real property in the United States. With fluctuations in market value, local governments and assessment offices have been slow to react to the deflation in market prices of homes, causing an undue tax burden on individuals whose primary residence is now worth much less than they are being taxed on it. Most states have come up with some kind of homestead exemption which helps to buffer losses in value and make the property tax bills more in-line with the actual value of the home without having to go through a reassessment process. Indiana's homestead exemption is no exception.

Primary Residence Requirement

To qualify for the Indiana homestead exemption, you must be living in the residence you wish to claim the exemption for. It must be your primary residence and it must be residential and owner-occupied. Vacation homes and rental properties, therefore, are not eligible to claim the homestead tax exemption with regards to property taxes, and neither are businesses or non-residential real estate such as building lots. You must be able to prove that it is your primary residence if you are asked to do so by the tax officials.

In 2003, the Indiana homestead exemption was raised from $6,000 to $35,000 or 50% of the value of the home, whichever number is lower being the number that is granted as part of the exemption. This is a sizeable deduction and would make the taxable value of a house assessed at $125,000 only $90,000, creating a substantial savings for the homeowner in their property tax liability.

Filing Requirements

In order to receive these money saving exemptions on your property tax bill, you will have to file a written application with the County Auditor's office in the county in Indiana where your residence is located. Not doing so is a costly mistake, as you will be assessed at the full current assessed value and will be paying taxes on money which you would not have to pay taxes on otherwise.