Property Taxes and the Homestead Deduction in Indianapolis

Quick answer: after you close and move in, file the Indiana homestead deduction with the Marion County Auditor. The state form is the HC10, and it is due on or before January 15 of the year your first tax bill comes due. Filing gets you the homestead standard deduction, the supplemental deduction, the supplemental homestead credit and the 1% cap on your tax bill. The 2026 rate for the Indianapolis Center district is $2.7291 per $100 of net assessed value. On a $320,000 home in my example below, the bill lands near $2,900 a year, or about $242 a month in escrow.

If you are still working out your budget, start with my guide on where to start as a first-time buyer in Indianapolis. This post covers the tax side.

What does the homestead deduction do for a first-time buyer?

Indiana lets you take a deduction off the assessed value of the home you live in. The state's Claim for Homestead Property Tax form (HC10) calls it a standard deduction, and the same form covers the supplemental deduction. Filing opens up four things:

• The standard deduction. A fixed dollar amount comes off the assessed value. It is $40,000 for the 2026 assessment date.
• The supplemental deduction. After the standard deduction, a percentage of what is left comes off too. It is 46% for taxes due in 2027.
• The supplemental homestead credit. The Department of Local Government Finance (DLGF) says the credit is "the lesser of two values: (1) ten percent (0.1) of the property tax liability for the homestead for the calendar year, or $300." See the DLGF's 2025 legislative update FAQ.
• The 1% cap. The DLGF's circuit breaker fact sheet says "A property must receive the Homestead Standard Deduction (IC 6-1.1-12-37) in order to receive the 1% cap."

Each of those comes off or limits the tax bill. None of it happens until the Auditor has your application on file.

How do I file the homestead deduction after closing?

Filing is a short job. I tell buyers to put it on the calendar the week they close.

1. Move in first. The HC10 says "A person must actually be eligible for the deduction at the time the application is signed, meaning the property is being used as the person's principal place of residence at the time of signing."
2. Fill out the HC10. It asks for your name, the last five digits of your Social Security number, the parcel number and whether you own other property. Married couples get one deduction between them.
3. File it with the Marion County Auditor. The form says "Forms must be filed at the county auditor's office in the county where the homestead is located." The Marion County Auditor's page is the place to start. Ask the office how it takes the form, whether by mail, in person or online, and ask for a file-stamped copy.
4. Meet the deadline. The HC10 says the application must be "completed, dated, and filed or postmarked with the county auditor on or before January 15 of the calendar year in which the property taxes are first due and payable." If you close in 2026, your first bill under the new owner comes due in 2027, so your date is January 15, 2027.
5. Check that it took. Ask the Auditor to confirm the deduction is on the parcel, then look for it on your first tax bill.

The same form says "The application applies for that first year and any succeeding year for which the deduction is allowed." You do not refile every year. If your use of the home changes, you have 60 days to tell the Auditor. The DLGF's May 2026 memo says a person who fails to notify the Auditor "shall (instead of may) be liable for any additional taxes that would have been due on the homestead property plus a civil penalty equal to ten percent (10%) of the additional taxes due." File for the home you live in and for no other.

Does the sales disclosure form at closing count as my application?

It can. The Indiana Board of Tax Review explains that a taxpayer "could use the sales disclosure form at the time of purchase to claim the deduction" (see its decision, citing IC 6-1.1-12-44). The DLGF's property tax benefits form lists the Sales Disclosure Form (State Form 46021) and the HC10 as the two application forms. At closing you may also get a gold or yellow sheet titled Indiana Property Tax Benefits. The form itself says it "is not considered an application for any of the listed property tax deductions or credits." Ask your title company whether the homestead section of your sales disclosure was completed, then confirm with the Auditor. If there is any doubt, file the HC10 yourself.

What is the 1% property tax cap in Indiana?

Indiana limits what a homestead can pay in property tax to 1% of its gross assessed value. The DLGF fact sheet gives this example: "a homestead property has a gross assessed value of $100,000. Under the 1% circuit breaker cap, the maximum tax liability that may be imposed on this property is $1,000." If the tax comes out higher, "the county auditor will apply a circuit breaker credit." The same sheet says the caps are part of the Indiana Constitution, which voters approved in November 2010.

Two details matter for your budget. First, the cap applies to gross assessed value, which is the value before deductions. Second, the fact sheet says "In most counties, the only exemptions from the property tax caps are for expenses related to capital projects or additional school operating or public safety funds that are approved by voters in a public referendum." A tax bill can show an adjustment for a voter-approved levy, so your bill can land above 1%. Ask your lender or the Auditor for the bill on the exact address you are buying. I wrote about how the ceiling shapes the rent-versus-buy math in should I rent or buy in Indianapolis.

What are the property tax rates in Marion County?

Rates are set by taxing district and stated per $100 of net assessed value, which is the value after deductions. The DLGF publishes them in each county's budget order. Here is the Indianapolis Center district (district 101).

The eight districts the 2026 order labels Indianapolis (Center, Decatur, Lawrence, Perry, Pike, Warren, Washington and Wayne) run from $2.6830 to $2.7291. The same order lists township districts it labels Outside, and those run from $2.4269 (Franklin Outside) to $3.6418 (Wayne Outside). Speedway, Beech Grove, Lawrence city and other towns have their own districts with different rates. Your tax bill lists your district, and the Auditor can tell you before you make an offer. Rates for taxes due in 2027 come out in the DLGF's next budget order, which the agency certifies in January. The 2026 figure is the latest official one as I write this in November 2026.

What changed with Senate Enrolled Act 1 in 2025?

Senate Enrolled Act 1 (2025) changed how the deductions work. The standard deduction steps down each year, and the supplemental deduction grows. The DLGF's May 27, 2026 memo restates the schedule after the 2026 session.

The supplemental deduction cannot exceed 75% of gross assessed value, per the DLGF's property tax benefits form. The memo also adds a definition of "principal place of residence" to the Indiana Code: "an individual's true, fixed, permanent home to which the individual has the intention of returning after an absence." That definition takes effect July 1, 2026. Use the schedule above for budgeting, and keep an eye on the next legislative session, since lawmakers can change it.

What will my property tax bill look like? A worked example

Here is the math on a $320,000 home, the September 2026 median sale price I used in my post on how much income you need to buy a house in Indianapolis. I assume the assessed value equals the price. The county assessor sets the real assessed value, and it can differ from what you pay. I use the 2026 assessment-date rules, so taxes would come due in 2027, and I use the $2.7291 district 101 rate as a stand-in, since the 2027 rate is not out yet.

The cap does the heavy lifting here. The tax before the cap is $4,126.40, and the cap brings it to $3,200.00. The supplemental credit then takes off $300. Without the homestead deduction, the property would sit in the 2% bucket the DLGF fact sheet lists for a single-family dwelling that is not part of a homestead. That cap would be $6,400 on this example, twice the homestead cap. In this example the cap alone is $3,200 lower for a homestead.

This is an estimate built from public figures. Voter-approved levies, an assessed value that differs from the price, and a different district rate all move the answer. Your lender's loan estimate and the Auditor are the numbers to trust.

How do property taxes land in my escrow payment?

Indiana bills property tax in two installments. The DLGF's citizen's guide says "Property taxes should be due in two installments annually - one on May 10 and one on November 10." Most buyers pay through an escrow account. The Consumer Financial Protection Bureau describes an escrow account as one "set up by your mortgage lender to pay certain property-related expenses," funded by "a portion of your monthly mortgage payment." It also says "Your property taxes and insurance premiums can change from year to year," and your escrow payment changes with them.

In my example, $2,900.00 a year becomes about $241.67 a month. That sits on top of principal and interest, and it is part of the full payment I walk through in pre-approval is not a budget. The DLGF form says approved deductions "will appear on the tax bill the year following the assessment date." Ask your lender which tax figure they used for your escrow estimate and whether it assumes the homestead deduction. If the estimate assumed no deduction, ask how the lender will adjust escrow once the deduction shows up.

What should I do before and after I close?

• Before you make an offer, ask the listing agent or the Auditor for the current tax bill and the taxing district on the address.
• Ask your lender what property tax figure sits in your loan estimate.
• Ask your title company about the Sales Disclosure Form and the homestead section.
• After move-in, sign the HC10, file it with the Marion County Auditor and keep the file-stamped copy.
• Put January 15 on your calendar for the year your first bill comes due.

Taxes are one part of the monthly picture. If you want a second set of eyes on a specific address, reach out and I will walk through it with you.