What is the property tax rate in Indiana?
Indiana property tax averages 0.76% of value for owner-occupied homes (Tax Foundation 2026, using the 2024 American Community Survey). That ranks Indiana 27th of the 47 states this site covers, below Ohio at 1.36% and Michigan at 1.19% and just above Kentucky at 0.74%.
That average is a homeowner figure, and homeowners in Indiana are capped at 1% of gross assessed value. Apartment owners work under a 2% cap instead, and in most city districts the tax rate is high enough that the cap, not the rate, sets the bill. Expect an apartment building in Indianapolis, Fort Wayne or Gary to pay close to 2% of its assessed value each year.
Indiana’s property tax caps: 1%, 2% and 3%
Since voters approved Senate Joint Resolution 1 in November 2010, Indiana’s property tax caps have been part of the state constitution, in Article 10, Section 1. The caps limit what an owner pays to a fixed percent of the property’s gross assessed value. When the rates in a district would produce a larger bill, the county auditor gives a circuit breaker credit for the excess, according to the Department of Local Government Finance (DLGF).
The DLGF’s November 2025 fact sheet sorts property into three tiers.
- Apartment buildings fall in the 2% tier, whatever their size, because a building with two or more dwelling units is residential property.
- Voter-approved referendum levies for capital projects, school operating funds or public safety sit outside the caps, so a bill in a referendum district can run above 2%.
- Commercial space in a mixed-use building is nonresidential property, which falls in the 3% tier. Check how each part of your parcel is coded on the bill.
| Cap | Property it covers |
|---|---|
| 1% of gross assessed value | Homesteads: an owner’s principal residence that receives the homestead standard deduction |
| 2% of gross assessed value | Residential property, including any building with two or more dwelling units and its common areas, single-family homes that are not homesteads, long-term care property and agricultural land |
| 3% of gross assessed value | Nonresidential real property, such as offices, retail and industrial, plus business personal property |
How Indiana assesses an apartment building
Indiana assesses property at market value-in-use, which the DLGF describes as the value of a property for its current use. For an apartment building that means its value as a rental, the use it has on the assessment date.
Values are set as of January 1 each year using sales from the prior calendar year. The DLGF’s appeals fact sheet gives the example of 2024 sales being used to set values as of January 1, 2025. Each year assessors apply an annual adjustment, also called trending, to move values with the market in each neighborhood. On top of that, a cyclical reassessment runs over four years, with about 25% of the parcels in each county visited and checked each year.
Does a sale trigger reassessment in Indiana?
No. Indiana has no rule that resets a parcel’s value to its sale price at closing. A sale still feeds the next annual adjustment, because assessors set each January 1 value from the prior year’s sales. A building that sells well above its assessed value is likely to see that value move up over the next year or two, and the buyer’s tax rises with it until it reaches the 2% cap.
Indiana also has no cap on how fast an assessed value can rise. The protection for owners is the cap on the tax itself, plus the rule that the assessor carries the burden of proof in an appeal when an assessment rises more than 5%.
The new 2% circuit breaker deduction for rental property
Senate Enrolled Act 1 of 2025 created a deduction for property in the 2% tier, found in IC 6-1.1-12-47. The DLGF has said that apartment complexes that qualify as residential property are eligible, and that no application is needed: county auditors apply it automatically.
The deduction is a percent of assessed value and phases in through 2031, according to the DLGF’s May 27, 2026 memo.
- The deduction lowers net assessed value, which is what the tax rate is applied to.
- The 2% cap is still measured on gross assessed value, so in districts where the cap already sets the bill, the deduction may not lower it.
- Where the uncapped bill is below 2%, as in some suburban districts, the deduction cuts the tax directly.
| Assessment year | Taxes payable | Deduction from assessed value |
|---|---|---|
| 2025 | 2026 | 6% |
| 2026 | 2027 | 12% |
| 2027 | 2028 | 19% |
| 2028 | 2029 | 25% |
| 2029 | 2030 | 30% |
| 2030 and later | 2031 and later | 33.4% |
Indiana property tax rates by district
Indiana rates are set per $100 of net assessed value for each tax district, the overlap of county, township, city, school and library units. The DLGF’s 2026 certified rates, published February 26, 2026, range from under $1 to over $8 per $100. The table shows a sample of districts from that report, with what the rate would mean for a $2,000,000 apartment building after the 6% deduction for taxes payable in 2026, and what the 2% cap holds it to.
County-wide averages are not shown because the report lists rates by district, and rates inside a county can differ by a factor of two or more. Look up your own district on your tax bill.
| District (county) | 2026 gross rate per $100 | Uncapped tax at $2M | Tax after 2% cap |
|---|---|---|---|
| Gary-Calumet (Lake) | $8.1000 | $152,280 | $40,000 |
| Cannelton City (Perry) | $6.4944 | $122,095 | $40,000 |
| Muncie (Delaware) | $4.9549 | $93,152 | $40,000 |
| East Chicago (Lake) | $4.7676 | $89,631 | $40,000 |
| Hammond (Lake) | $3.7529 | $70,555 | $40,000 |
| Fort Wayne, Wayne Twp (Allen) | $2.8975 | $54,473 | $40,000 |
| Indianapolis Center (Marion) | $2.7291 | $51,307 | $40,000 |
| Fishers (Hamilton) | $2.1994 | $41,349 | $40,000 |
| Carmel (Hamilton) | $2.0167 | $37,914 | $37,914 |
| Jefferson East (Kosciusko) | $0.8126 | $15,277 | $15,277 |
How to appeal property taxes in Indiana
File Form 130 with your county or township assessor by June 15. Under the DLGF’s November 2025 fact sheet, the deadline is June 15 of the assessment year if the county mailed the Form 11 notice of assessment before May 1, and otherwise June 15 of the year the tax bill is mailed.
The county property tax assessment board of appeals (PTABOA) must hold a hearing within 180 days of the filing. If it has not decided the appeal by then, you can take it to the Indiana Board of Tax Review on Form 131. If your assessment rose more than 5%, the assessor must prove the new value is right.
- June 15: Form 130 deadline in most years.
- Bring a rent roll, the last three years of operating statements and any recent appraisal.
- Check the parcel’s cap category and deductions on the bill as well as the value. A coding error can cost more than a value dispute.
Worked example: property tax on a $2M Indiana apartment building
Take a 30-unit building in the Indianapolis Center district with a gross assessed value of $1,500,000 for taxes payable in 2026. After the 6% deduction, net assessed value is $1,410,000. At $2.7291 per $100, the uncapped tax is $38,480. The 2% cap is $30,000, so the owner pays $30,000.
A buyer pays $2,000,000. If trending carries the assessed value to the sale price, the uncapped tax becomes $51,307 and the cap rises to $40,000, an increase of $10,000 a year. At an illustrative 7% cap rate, $10,000 of lost NOI is worth about $142,857 of value to the buyer.
The same move in Carmel plays out differently. There the uncapped tax goes from $28,435 to $37,914, both below the cap, so the deduction helps. Once the deduction reaches 33.4% for taxes payable in 2031, and holding today’s rates, the Carmel bill on a $2,000,000 value would drop to about $26,862, and the Indianapolis Center bill would slip below the cap to about $36,352. The Tax Foundation’s 0.76% homeowner average would suggest $15,200, which is why buyers underwrite Indiana apartments from the cap and the district rate.
| Scenario | Gross assessed value | Yearly tax |
|---|---|---|
| Indianapolis Center, current value | $1,500,000 | $30,000 (capped) |
| Indianapolis Center, value at $2M sale price | $2,000,000 | $40,000 (capped) |
| Carmel, current value | $1,500,000 | $28,435 |
| Carmel, value at $2M sale price | $2,000,000 | $37,914 |
| 0.76% statewide homeowner average at $2M | $2,000,000 | $15,200 |
Indiana property tax compared with neighboring states
Indiana’s 0.76% homeowner average is close to Kentucky’s and well below Ohio, Michigan and Illinois, using the Tax Foundation’s 2026 figures. Illinois, at 1.88%, has more than twice Indiana’s effective rate.
For apartment owners the cap matters more than the average. Indiana is unusual in putting a hard ceiling on the tax for rental property, so an owner trading a Chicago-area building for one in northwest Indiana can underwrite the tax line at no more than 2% of assessed value, plus any referendum levies.
| State | Effective rate (Tax Foundation 2026) |
|---|---|
| Illinois | 1.88% |
| Ohio | 1.36% |
| Michigan | 1.19% |
| Indiana | 0.76% |
| Kentucky | 0.74% |
How property tax affects your sale price
Indiana’s 2% cap makes the tax line easier to predict than in most states. In a district whose rate is well above $2 per $100, a buyer can assume the bill will be 2% of whatever the assessor lands on, and the main question becomes how fast the value catches up to the price. Referendum levies outside the cap are the exception, so check the bill for them.
Give buyers the last three tax bills, the current gross and net assessed values, the circuit breaker credit shown on each bill and any open appeal. A building that already pays at the cap carries less tax risk than one whose bill sits below it in a high-rate district.
Selling an apartment building in Indiana
Skyline buys apartment buildings with five or more units in Indiana, in capped city districts and lower-rate suburbs alike. We buy directly, close on your timeline, and can work inside 1031 deadlines. We underwrite from your actual bill and the cap, so the tax line does not change late in the deal.
For the tax on the sale itself, see our page on Indiana capital gains tax on real estate, and for the tenant rules, Indiana landlord-tenant law for apartment owners.
