Your 2027 Indiana Property Tax Bill: What SEA 1 Changes and Why Jan 15 Matters

For bills first due in 2027, Indiana's homestead standard deduction drops to $40,000 and the supplemental homestead deduction rises to 46%. Those figures come from Senate Enrolled Act 1 (2025), as restated in the Indiana Department of Local Government Finance (DLGF) memo of May 27, 2026. If you bought a home in 2026 and it is your main residence, file the homestead deduction with your county auditor by January 15, 2027, or confirm that the Sales Disclosure Form at closing already covered it.

This post covers Clark, Floyd, Harrison, Scott and Washington counties in Southern Indiana. It is general information, not tax or legal advice. Confirm deadlines and eligibility with your county auditor before you file.

Key takeaways

• 2027 bills use a $40,000 standard deduction and a 46% supplemental deduction on the remainder (DLGF memo, May 27, 2026).
• A separate supplemental homestead credit takes 10% off the tax bill, up to $300, starting with 2026 bills (Purdue Extension Capital Comments, Sept. 12, 2025).
• Bought in 2026? File with the county auditor by January 15, 2027, using the Indiana Property Tax Benefits form, or ask title/closing whether the Sales Disclosure Form already checked homestead.
• Taxable assessed value can fall while rates rise. Purdue Extension says big new deductions shrink the tax base, so rates go up. A lower net AV does not automatically mean a lower bill.

Table of contents

1. What changes on 2027 bills?
2. What it means for a typical Southern Indiana home
3. Bought in 2026: what to file and by when
4. If the home stops being your main residence
5. Seniors and veterans
6. Is Indiana ending property taxes?
7. Rentals and second homes
8. Indiana vs Kentucky, quick comparison
9. Getting introduced to a local agent
10. FAQs

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What changes on Indiana property tax bills in 2027?

Short answer: the standard homestead deduction falls to $40,000 for the January 1, 2026 assessment date, and the supplemental homestead deduction rises to 46% for taxes due in 2027.

A deduction comes off assessed value before the tax rate is applied. A credit comes off the bill after the rate is applied. Keep those separate when you read your statement.

Per the DLGF May 27, 2026 memo (Section II), SEA 1 phases the homestead standard deduction by assessment date and the supplemental deduction by the year taxes are due:

Taxes first due in	Assessment date	Standard deduction	Supplemental deduction
2026	Jan 1, 2025	$48,000	40%
2027	Jan 1, 2026	$40,000	46%
2028	Jan 1, 2027	$30,000	52%
2029	Jan 1, 2028	$20,000	57%
2030	Jan 1, 2029	$10,000	62%
2031	Jan 1, 2030	$0	66.7%

On top of those deductions, SEA 1 added a supplemental homestead credit: 10% of the bill, capped at $300, starting with taxes due in 2026. Purdue Extension's Larry DeBoer describes it as a subtraction from the bill after the rate is applied (Capital Comments, Sept. 12, 2025). The DLGF order-of-operations chart in the May 27 memo lists the Supplemental Homestead Credit at step 6, after the property tax caps and the Over 65 / Blind/Disabled / Disabled Veterans credits.

Homestead property also stays under Indiana's 1% circuit breaker cap: if the bill would exceed 1% of the property's gross assessed value, the auditor applies a circuit breaker credit down to that ceiling (DLGF Fact Sheet: Circuit Breaker Caps). You need an approved homestead deduction to get the 1% cap.

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What does it mean for a typical Southern Indiana home?

Short answer: net taxable assessed value falls for many homesteads from the 2026 bill to the 2027 bill, but that is not the same as a lower tax bill.

Math for net taxable AV after the two homestead deductions: (gross AV - standard deduction) x (1 - supplemental %). The sale prices below are labeled as example AVs. Assessed value is not sale price. The 1% column is the homestead circuit breaker ceiling on the bill (1% of that gross AV), not a predicted tax bill. Without a named taxing district's certified rate, we do not invent a full bill.

Gross AV (sale price used as example AV)	Net taxable AV, 2026 bill	Net taxable AV, 2027 bill	Change	1% homestead cap on the bill
$200,000	$91,200	$86,400	-5.3%	$2,000
$275,000 (Clark County Q3 2026 median sale)	$136,200	$126,900	-6.8%	$2,750
$295,000 (Floyd County Q3 2026 median sale)	$148,200	$137,700	-7.1%	$2,950

Purdue Extension is direct on the rate side: "Property tax rates will rise. Big new deductions mean rates must be higher to collect local revenue" (Capital Comments, Sept. 12, 2025). So taxable AV can drop while the rate goes up. Your actual bill depends on your district's certified rate, any other deductions or credits, and whether the 1% cap binds.

Shopping before you buy? Run the payment on the affordability calculator, then ask the auditor or a recent tax statement for that parcel's bill history.

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I bought a home in 2026. What do I file, and by when?

Short answer: file the homestead deduction with the county auditor by January 15 of the year taxes are first due. For a 2026 purchase, that means January 15, 2027.

The DLGF Deductions and Credits page says deductions and credits applied for on or before January 15 apply to the next year's tax bill. Use the Indiana Property Tax Benefits form (forms.in.gov Download id=6015).

At many closings, the Sales Disclosure Form can serve as the homestead application when the homestead box is checked. Ask your title or closing company whether that box was checked and whether the form was filed with the auditor. If you are not sure, file the Property Tax Benefits form yourself before January 15, 2027.

Southern Indiana county auditor pages:

• Clark County Auditor
• Floyd County Auditor
• Harrison County Auditor
• Scott County Auditor
• Washington County Auditor

Without the homestead deduction, the home does not get the 1% homestead circuit breaker cap.

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What if my home stops being my main residence?

Short answer: HEA 1210 requires you to notify the county auditor within 60 days of becoming ineligible. Missing that notice and still claiming homestead now brings a mandatory back-tax bill plus a 10% civil penalty.

Per the DLGF May 27, 2026 memo (Section I.C), Ind. Code § 6-1.1-12-37(g) was amended so a person who fails to notify the auditor as required and claims the deduction shall (not may) be liable for additional taxes that would have been due, plus a civil penalty equal to 10% of those additional taxes.

The same memo says the auditor shall issue a notice that includes a 10% fine for a false homestead claim, calculated as 10% of the taxpayer's total tax bill as if the homestead deduction had not been applied. That is on top of other penalties. Check with your auditor if your use of the property changed.

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Are there breaks for seniors and veterans?

Short answer: seniors may qualify for a $150 Over 65 Credit and a separate Over 65 circuit breaker. Totally disabled veterans have their own deduction path.

SEA 1 converted the old Over 65 deduction into an Over 65 Credit of $150, first applied on 2025 pay 2026 bills (DLGF 2025 Legislative Overview presentation, June 18, 2025). Income limits and other rules apply. Ask your auditor before you assume you qualify.

HEA 1210 also added a reside-on-the-property requirement for the Over 65 Credit, with an exception when the owner is in a nursing home or hospital (DLGF memo, Section VI). A separate Over 65 circuit breaker can limit year-over-year increases for qualifying seniors. The DLGF posted an Over 65 Circuit Breaker income threshold memo for pay 2027. Confirm current numbers with your auditor.

For totally disabled veterans, see our guide to the Indiana disabled veteran property tax deduction.

One PAA mix-up to clear: the "$6,000 senior tax break" in national headlines is a federal income tax enhanced deduction for people age 65 or older for tax years 2025 through 2028 (IRS). It is not an Indiana property tax credit.

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Is Indiana ending property taxes?

Short answer: no. SEA 1 phases homestead deductions through 2031. Talk of ending homeowner property taxes is still proposal-stage for the 2027 session.

SEA 1 does not repeal property taxes. It changes deduction and credit schedules year by year through 2031. Separately, some legislators have talked about ending property taxes on the home you live in. The Indiana Capital Chronicle (Sept. 4, 2026) reported that plan as a campaign and town-hall topic with few public details on how local revenue would be replaced. Those ideas are proposals until a bill passes and is signed. Until then, plan around the DLGF schedule above.

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What about rentals and second homes?

Short answer: rentals and other 2% circuit breaker properties get a separate AV deduction that rises to 12% for 2026 pay 2027. No application is required.

The DLGF May 27, 2026 memo (Section II.C) lists the deduction for 2% circuit breaker properties (including residential rental property under Ind. Code § 6-1.1-20.6-7.5(a)(2)):

Tax year	Deduction of AV
2025 pay 2026	6%
2026 pay 2027	12%
2027 pay 2028	19%
2028 pay 2029	25%
2029 pay 2030	30%
2030 pay 2031 and after	33.4%

Auditors apply this without a separate application. A second home that is not your homestead does not get the homestead standard or supplemental deductions or the 1% homestead cap. Check your auditor if the use of a property changed.

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Indiana vs Kentucky: a quick comparison

Short answer: Indiana offers homestead deductions to owner-occupants generally. Kentucky's statewide homestead exemption is limited to age 65+ or totally disabled owners.

	Indiana (taxes due 2027)	Kentucky (2025-2026 assessment years)
Main homestead relief	$40,000 standard + 46% supplemental deductions (DLGF)	$49,100 homestead exemption (KY Dept of Revenue historical data)
Who qualifies	Owner-occupant principal residence (homestead rules)	Age 65+ or classified totally disabled, with other requirements (KY DOR Homestead Exemption)
Bill-side credit	Supplemental homestead credit: 10% of the bill, max $300 (Purdue)	Statewide homestead is an assessment exemption

Kentucky has not published a 2027-2028 homestead exemption amount on that historical table as of this writing. Do not assume the $49,100 figure carries forward. Cross-river shoppers comparing Buying paths should verify both sides with the county auditor (IN) or PVA (KY).

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Getting introduced to a local real estate agent who tracks the tax calendar

Agent Intro is an introduction and referral service for home buyers and sellers in Southern Indiana and Greater Louisville. If you want help from someone who knows the January 15 homestead deadline and local listing norms, start your Match Profile. A member of our team will review your Match Profile, then we introduce you to one of our vetted local real estate agents. You decide whether to hire them.

Already working with someone and want a second look? Second Opinion gets you one alternative introduction to compare. Read How It Works and How We Choose Agents.

Disclosure: Agent Intro is an introduction and referral service of Aire Realty, LLC, an Indiana-licensed real estate brokerage. Agent Intro earns a referral fee when an introduction leads to a closed transaction. You're not required to hire anyone. See our Disclosure. This post is general information, not tax, legal or lending advice.

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FAQs

How much is the Indiana homestead deduction for 2027 bills?

For taxes first due in 2027 (January 1, 2026 assessment date), the standard homestead deduction is $40,000 and the supplemental homestead deduction is 46% of the remainder after the standard deduction (DLGF memo, May 27, 2026).

When do I have to file the homestead deduction in Indiana?

By January 15 of the year taxes are first due, with the county auditor. For a home bought in 2026, file by January 15, 2027, or confirm the Sales Disclosure Form already covered homestead (DLGF Deductions and Credits, Property Tax Benefits form).

Is Indiana getting rid of property taxes?

No. SEA 1 phases deductions and credits through 2031. 2027 session ideas about ending homeowner property taxes are proposals until signed into law (Indiana Capital Chronicle, Sept. 4, 2026).

Will my Indiana property tax bill go down in 2027?

Not necessarily. Net taxable AV often falls under the new deduction schedule, but Purdue Extension says property tax rates will rise as deductions shrink the tax base. Your district rate and credits decide the bill.

What is the $6,000 tax break for seniors?

It is a federal income tax enhanced deduction for people age 65 or older for tax years 2025 through 2028, not an Indiana property tax break (IRS).

Do disabled veterans pay property tax in Indiana?

Totally disabled veterans may qualify for a 100% assessed-value deduction on their principal residence. See the Indiana disabled veteran property tax deduction for eligibility and the January 15 filing rules.

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Data note: Clark and Floyd median sale prices cited above are from the linked Q3 2026 county posts (local MLS data). Sale price is used only as an example assessed value for the deduction math. It is not the assessor's AV. Deduction and credit figures are from the DLGF May 27, 2026 memo and the cited Purdue Extension and DLGF presentation pages. Confirm your parcel with the county auditor before relying on any figure for a tax decision.