The Indiana Senate voted 27-22 to approve Senate Bill 1, a comprehensive property tax reform package that aims to provide relief to homeowners and businesses across the state.
The Benefits for Homeowners
The key provisions of the bill are designed to benefit most homeowners in Indiana. According to Sen. Travis Holdman (R-Markle), two-thirds of homeowners will receive a bill less than they received in 2025, thanks to a 10 percent credit on their property tax bill, up to $300. This credit will be in addition to a one-time credit of $150 for homeowners aged 65 and older, and a one-time credit of $250 for disabled veterans.
- Homeowners will receive a credit of up to $300 on their property tax bill.
- Homeowners aged 65 and older will receive an additional credit of $150.
- Disabled veterans will receive an additional credit of $250.
The Impact on Local Governments and Schools
The bill also includes provisions that will affect local governments and schools. Scott Baldwin (R-Noblesville), providing relief to homeowners will mean that local governments and schools might not receive as much money as they would have, but this doesn’t necessarily mean a loss. Most schools will receive more money in 2026 than they did in 2025, and most local governments will also receive more money in 2026 than they did in 2025.
| Provision | Impact on Local Governments and Schools |
|---|---|
| 10 percent credit on property tax bill, up to $300 | Relief for homeowners, potential loss for local governments and schools |
| Additional credits for homeowners aged 65 and older and disabled veterans | Increased relief for these groups, potential impact on local governments and schools |
| Provisions affecting property tax sharing between traditional public school districts and charter schools | Requires local property tax revenue to be shared between traditional public school districts and charter schools, starting in 2028 |
The Impact on Schools
The bill also includes provisions that will affect schools. LaKeisha Jackson (D-Indianapolis), the requirement that local property tax revenue be shared between traditional public school districts and charter schools starting in 2028 will have a devastating impact on some schools. “For some, it will defund them and possibly, potentially close them,” she said.
- Requires local property tax revenue to be shared between traditional public school districts and charter schools, starting in 2028
- Could have a devastating impact on some schools, potentially defunding or closing them
The Impact on Businesses
The bill also includes provisions that will benefit businesses. Scott Baldwin (R-Noblesville), the increase in the threshold for exempting businesses from paying personal property tax will benefit most businesses. “Most businesses who currently pay that tax won’t have to anymore,” he said.
- Increases the threshold for exempting businesses from paying personal property tax to $2 million
- Benefits most businesses, potentially saving them money
The Impact on Property Tax Deductions
The bill also includes provisions that will affect property tax deductions. Scott Baldwin (R-Noblesville), the legislation will phase out the standard homestead deduction and the supplemental deduction entirely to create a new, single deduction: 66.7 percent of the homestead’s assessed value.
- Phases out the standard homestead deduction and the supplemental deduction
- Creates a new, single deduction: 66.7 percent of the homestead’s assessed value
The Final Vote
The final vote was narrow, 27-22, with some Republicans joining Democrats in opposition. Despite this, the bill has received support from Gov. Mike Braun, who has stated that he will sign the bill.
“This is historic property tax relief that makes the system ‘fairer, more transparent, and easier to understand,’” said Gov. Mike Braun.
Key Takeaways:
- Senate Bill 1 provides relief to homeowners, including a 10 percent credit on their property tax bill and additional credits for homeowners aged 65 and older and disabled veterans.
- The bill includes provisions that will affect local governments and schools, including the requirement that local property tax revenue be shared between traditional public school districts and charter schools starting in 2028.
- The bill benefits businesses by increasing the threshold for exempting businesses from paying personal property tax and phasing out the standard homestead deduction and the supplemental deduction.
- Gov. Mike Braun has stated that he will sign the bill, despite criticism from Lt. Gov.