Why It Matters
Indiana property owners are facing another year of rising assessed values, continuing a multi-year trend that has strained household budgets and prompted state lawmakers to restructure how property tax relief is delivered. The increases affect how much homeowners and businesses ultimately owe in property taxes, even as new state law moves to cushion some of the impact.
What Happened
Gross assessed values across Indiana rose approximately 9.7% from 2025 to 2026, according to data compiled by the state’s Department of Local Government Finance from ratio studies conducted by the state’s 92 county assessors. The increase spans residential, commercial, and industrial properties, though the growth rate has slowed compared to the prior year’s 19% jump.
Residential properties — which account for more than three-quarters of all assessed value statewide — grew 7.3% this year. Commercial properties, representing 16% of the statewide total, rose 15%. Industrial properties, at 7% of the total, climbed a sharper 25.8%.
Governor Mike Braun acknowledged the pressure the ongoing increases place on property owners. “The whole assessment system is something that needs to be looked at,” Braun said, signaling potential future action beyond the relief measures already signed into law.
By the Numbers
9.7% — statewide average increase in gross assessed value across all property types, 2025 to 2026.
25.8% — increase for industrial properties, the sharpest rise among major property categories.
19% — assessed value increase recorded the prior year, from 2024 to 2025, indicating some moderation in the pace of growth.
956% — the extraordinary spike in industrial vacant property assessed values in Boone County, the most dramatic county-level outlier in this year’s data.
$1.2 billion — projected collective savings for homeowners over 2026 through 2028 under Senate Enrolled Act 1, passed during the 2025 legislative session.
County-Level Variation
The statewide average masks significant differences across Indiana’s 92 counties. Warren County posted a 29.4% increase in assessed value — among the highest in the state — while Huntington County recorded just 1.3% growth, illustrating how local real estate conditions and industrial activity shape outcomes at the county level.
Boone County’s 956% surge in industrial vacant property values is an extreme outlier likely tied to rapid commercial and data center development activity in that corridor of central Indiana, though officials have not publicly attributed the spike to a single cause.
Property Tax Relief Law Takes Effect
Indiana lawmakers anticipated continued assessment growth when they passed Senate Enrolled Act 1 during the 2025 session. The law creates a 10% credit on every homestead property tax bill, capped at $300 per parcel, and is projected to deliver $1.2 billion in collective savings to homeowners between 2026 and 2028.
To further limit local tax burdens, the law also caps total local income tax rates for all counties at 2.9%, reduced from a prior ceiling of 3.75%, with municipalities allowed up to 1.2% within that county total.
The relief comes at a cost to local governments. Indiana’s cities, counties, and townships are projected to absorb a combined $1.5 billion in lost revenue over the law’s first three years, with public school corporations bearing roughly half of that reduction.
Zoom Out
Indiana’s trajectory mirrors national patterns. Many states experienced sharp property value increases in the wake of pandemic-era real estate activity, and legislatures across the country have responded with homestead exemptions, assessment caps, and tax credit programs. The tension between providing homeowner relief and maintaining adequate local government revenue — particularly for schools — is a policy challenge playing out in statehouses well beyond Indiana.
The pressure on public finance is compounding at multiple levels, as state and federal budgets alike grapple with structural revenue and spending gaps.
What’s Next
Governor Braun’s call to review Indiana’s assessment system suggests additional legislative attention is possible in a future session. Meanwhile, county assessors will continue annual ratio studies, and homeowners will begin seeing the homestead credits reflected in 2026 tax bills. Local government units, particularly school districts, will need to adjust budgets to account for the revenue shortfall created by the new relief law.