Homestead Tax Deduction in Indiana

by Mark Vansetti ; Updated July 27, 2017
The homestead deduction lower's the taxable value of a piece of property.

Property owners in Indiana must pay property taxes each year. Indiana County Treasurers typically send out a bill each year indicating the amount of tax that must be paid. The amount is based primarily on the value of the property. One way to lower the property's tax liability is to take advantage of an exemption or deduction that lowers the property's taxable value. The homestead deduction is one way to do this.

What Is a homestead

Under Indiana law, a residence qualifies as a homestead if a person's principal place of residence meets certain criteria. The residence must be located in Indiana. The property must be owned by the individual living in it, or the individual must be buying the property under contract or entitled to occupy the property as a tenant. Lastly,the homestead residence includes the dwelling and real estate, up to 1 acre, immediately surrounding the dwelling.

Timing

To apply for the Indiana Homestead Property Tax Deduction, an application must be filled out in a timely manner. Applications must be filed with the county in which the property exists on or before Jan. 5 of the year before the year the property owner wishes to apply the deduction. For mobile or manufactured homes, the application must be filed anytime during the 12 months before March 31 of the year the property owner wishes to apply the deduction.

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Married Couples

Only one person can apply a homestead property tax deduction for each piece of property. Therefore, a married couple may apply the deduction as a couple, but not each individually. However, if a married couple is living separately, and one spouse owns property outside of Indiana, the property owner in Indiana may apply for the homestead deduction regardless of the other party to the marriage.

Summer Homes

To be eligible for the homestead property tax credit, the property must be the principal place of residence. Under certain circumstances, an Indiana County Auditor may allow the deduction if the property owner proves that the summer home is used as a primary place of residence and the property owner is not taking the deduction on another piece of property.

Amount of the Deduction

If a property owner meets all of the criteria for the homestead property tax deduction, the amount of the deduction is the standard amount or 50 percent of the gross assessed value. The standard amount is $35,000. This means that properties with a gross assessed value of $75,000 or less will be allowed a $35,000 deduction and properties with a gross assessed value of $75,001 or more will be allowed a deduction of 50 percent of the value.

About the Author

Mark Vansetti is a licensed attorney and, along with his Juris Doctor, holds bachelor's degrees in both human biology and economics. Throughout his professional career, he has written on a variety of topics for the American Bar Association Health Law Section, FindLaw and other websites. Vansetti also served as the senior editor of his law school's law review.

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