Indiana Homestead Exemption: How to Qualify and File

The Indiana homestead exemption is a property tax deduction designed to provide financial relief to homeowners. It functions by reducing the assessed value of an individual’s primary residence, which in turn lowers the property tax liability. This tax benefit applies to the home and up to one acre of the surrounding land.

This deduction is not a cash rebate but a direct reduction of the value upon which taxes are calculated. Understanding this deduction is an important step for homeowners to ensure they are taking advantage of the relief measures available to them.

Exemption Amounts and Eligibility

The homestead deduction consists of two parts: the standard deduction and the supplemental deduction. The standard homestead deduction is the lesser of 60% of the property’s assessed value or a maximum of $48,000. For instance, if a home has an assessed value of $100,000, the standard deduction would be $48,000, while a home valued at $70,000 would receive a deduction of $42,000 (60% of the value).

Following the standard deduction, homeowners are also entitled to a supplemental homestead deduction. This additional deduction is calculated on the remaining assessed value. The supplemental deduction for 2025 is 37.5% on the remaining assessed value up to $600,000 and 27.5% on the value exceeding $600,000. These percentages can change from year to year based on legislative updates.

To qualify for these deductions, the property must be the owner’s primary residence as of the assessment date. The owner must either hold the title to the property or be purchasing it on a recorded contract. An individual or a married couple can only claim one homestead deduction for one property.

If a homeowner’s property becomes ineligible, for example, if they move or convert it to a rental, they must file a certified statement with the County Auditor within 60 days. Failure to do so can result in liability for the amount of the deduction previously allowed, plus a civil penalty equal to 10% of the additional taxes that become due.

Other Common Indiana Property Tax Deductions

Beyond the homestead exemption, Indiana offers several other property tax deductions that can provide further financial relief.

The Over 65 Deduction provides a deduction of up to $14,000 from the assessed value. To be eligible, the individual must be at least 65 years old by December 31 of the preceding year, have owned the property for at least one year, and the property’s assessed value must not be more than $240,000. Additionally, the applicant’s adjusted gross income cannot exceed $34,494.86 if single, or a combined income of $45,993.15 for a couple.

The state also provides a Deduction for Blind or Disabled Persons. This allows for a $12,480 deduction from the assessed value for individuals who meet the legal definition of blindness or have a qualifying disability, as long as their taxable gross income for the preceding year did not exceed $17,000. Proof of disability is required, which can include a statement from a physician or evidence of receiving disability benefits under the Social Security Act.

Indiana provides specific property tax deductions for veterans. A deduction of $14,000 is available for veterans who are either totally disabled or are at least 62 years old with a disability of at least 10%, provided the home’s assessed value is under $240,000. A separate deduction of $24,960 is available for veterans with a service-connected disability of 10% or more related to wartime service. A surviving spouse may also be able to claim these deductions.

Information and Forms for Filing

To file for the homestead deduction, homeowners must gather specific information. The most critical piece of information is the property’s parcel number, which can be found on a previous property tax bill or by searching the county assessor’s public records online. The full names of all legal owners as they appear on the title and the complete property address are also required.

The application for the standard and supplemental deductions is made using a single form. This form can be obtained from the local County Auditor’s office or its website. Many counties provide a downloadable version of the form.

When completing the form, the applicant must enter their name, property address, and parcel number exactly as they appear in official records. The form will require the applicant to certify that the property is their primary residence. The signature of the owner is required to finalize the application.

The Application Process

Homeowners can submit the completed form by mailing it directly to their County Auditor’s office or by filing in person. The application must be filed with the County Auditor on or before December 31 to ensure the deduction applies to the property taxes payable in the following year. It is advisable to check with the local auditor’s office for specific dates, as some counties may have earlier deadlines.

After the application is submitted and approved, the homestead deduction will be reflected on future property tax statements. The deduction renews automatically each year, so homeowners do not need to reapply annually. A new application is only necessary if there is a change in the property’s title or if the owner moves and establishes a new primary residence.