A real estate perspective in the Hoosier property tax debate

Yahoo

17-02-2025

Indiana lawmakers are trying to find a balance between rising property tax bills and local governments' need for revenue to provide services. (Getty Images)
Any Hoosier who has bought or sold a home in recent years can attest to the rising price of putting down roots in Indiana – our statewide median home price is up 60% since 2018 to hit $250,000 in January.
Rising property values are a good thing: Indiana is growing, attracting new residents, employers and investment. And housing budgets still go much further in Indiana, with costs nearly 40% lower than the national average.
But if you aren't in the market to move, the most tangible effect of higher housing prices is higher property assessments and tax bills. For seniors on fixed incomes, young families who have worked their way into starter homes and a growing number of moderate-income Hoosier homeowners, Indiana's growing property tax burden represents a real hardship.
REALTORS® understand the importance of a fair and affordable property tax climate and we've championed significant and lasting residential tax relief through the years. So we're grateful for the leadership of Gov. Mike Braun and the many lawmakers who embrace the cause of pro-homeowner reform.
Senate Bill 1 is a blueprint for reducing homestead taxes. Homeowners have essentially been hit with a $2 billion property tax increase in the past six years, and we support efforts to ease their burden.
But with two-and-a-half months left in this session, there's plenty of debate and discussion left on the topic of property taxes. Senate Bill 1 has already changed significantly, and the House will certainly have their say. With that in mind, we offer a few considerations on behalf of the 21,000 REALTORS® who have long been a leading voice of taxpayers at the Statehouse.
REALTORS® proudly stood with then-Gov. Mitch Daniels to fight for a constitutional cap on homestead property taxes at 1% of a home's assessed value; the caps have saved taxpayers more than $11 billion since 2010.
Current proposals range from targeted relief for certain groups of taxpayers to a broad-based maximum tax liability credit or scaling up homestead assessed value deductions across the board.
The momentum for property tax relief is on the right trajectory, but whatever approach ultimately becomes law, it must preserve uniform and objective methods of taxation – property assessments should fairly reflect value.
Before 2000, Indiana's assessment system was based on arbitrary adjustments to largely outdated estimates of how much a home cost to build. The system bred inequitable taxation, provoked a seven-year court battle and nearly a decade of chaos for taxpayers before 2008. We should learn from this history, and leave artificial caps on assessments out of any serious negotiations on restructuring.
Local officials are concerned about the revenue losses that come with lower property taxes. REALTORS® recognize a healthy balance between cost of living and quality of life: Communities demand and deserve quality public services and physical infrastructure.
But Indiana's system of local government was designed in the age of horse-and-buggy, not high-speed internet. Overlapping layers of government push property taxes rates up while creating a confusion of duplicative bureaucracies.
Eliminating township government, consolidating administrative offices while keeping policymakers accountable to voters and stopping the runaway creation of special taxing districts can all help our cities, counties and school districts live within a limited tax base.
In 2024, 13,000 homes were available across our eight MLS marketplaces on a given day. This number was nearly 40,000 ten years ago. Indiana has underbuilt new homes for more than a decade – since 2014, we've grown by more than 250,000 new households while building less than 173,000 new housing units.
This long-term housing shortage explains why we were already seeing statewide home prices rising faster than the U.S. before the pandemic. Looking ahead, the only sustainable way to keep homeownership affordable and assessments in check is ramping up new home construction to match supply with demand.
We're pleased that the plight of homeowners has taken center stage at the statehouse. REALTORS® have worked with governors, lawmakers and local partners to build one of the nation's most competitive property tax climates – and this year, we see opportunities to put Indiana even further ahead.
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