Indiana Senate Enrolled Act 1-2025, signed April 15, 2025 and codified as Public Law 68-2025, does not cut a homestead property tax bill with a single lever. It phases the homestead standard deduction down from $48,000 to zero while simultaneously phasing the supplemental homestead deduction up from 40 percent to 66.7 percent, and the two schedules are keyed to different years, one to the assessment date and one to the year taxes are first due and payable. That mismatch is the reason most homeowners who try to compute their own bill get the wrong answer.

We field this question constantly across Hamilton and Boone County, from Carmel and Zionsville to Westfield, Fishers, Noblesville, Whitestown and Lebanon. Someone reads that the homestead deduction is $40,000 in 2026, applies it to the bill sitting on the kitchen counter, and comes out low. The number is real. It is simply not the number that belongs on that bill. What follows is the mechanism, cited to the enrolled act and to the Department of Local Government Finance, with the arithmetic separated from the projections.

What did Senate Bill 1 actually become, and when?

Senate Enrolled Act 1-2025 was signed by Governor Mike Braun on April 15, 2025 and became Public Law 68-2025. That is the operative document. Summaries, memos and news coverage all describe it, but the enrolled act is what a county auditor applies.

Most of the homestead provisions were made retroactively effective to January 1, 2025, which is why the first bills reflecting the new structure are the ones payable in 2026. The 2026 legislative session then revisited parts of the scheme through House Enrolled Act 1210-2026, signed March 12, 2026. HEA 1210 left both homestead schedules intact and changed other things, which we cover below.

Sources: Senate Enrolled Act 1-2025, as enrolled, Indiana General Assembly; signing date and Public Law number per IGA bill actions and the Indiana Department of Local Government Finance memorandum of June 12, 2025. HEA 1210-2026 signing date per DLGF memorandum, May 27, 2026.

Why is the homestead standard deduction going down?

Because the statute says so, on a fixed schedule, and because it is only one half of a two-part trade. Section 44 of SEA 1 amended Indiana Code 6-1.1-12-37(c) to set the homestead standard deduction at $48,000 for the 2025 assessment date, $40,000 for 2026, $30,000 for 2027, $20,000 for 2028 and $10,000 for 2029. The act then states plainly that beginning with the 2030 assessment date, and each assessment date thereafter, the deduction amount is zero.

Read in isolation, that looks like a straightforward tax increase on homeowners. It is not the whole instrument, and any summary that names only this leg is wrong. The supplemental deduction moves the other way over the same period, and it moves further.

What happened to the old 60 percent test?

It is gone. Before the 2025 assessment date, the standard deduction was the lesser of 60 percent of assessed value or $48,000. SEA 1 struck that comparison and replaced it with the flat declining dollar amounts above. The practical effect is that the standard deduction no longer scales with the value of the home at all. For assessment dates from 2025 forward it is a fixed dollar figure, identical for a modest ranch and for a large custom build, until it reaches zero.

Source: SEA 1-2025 enrolled act, Section 44, amending IC 6-1.1-12-37(c), iga.in.gov. Schedule restated in the DLGF memorandum of May 27, 2026, Section II.A.

What does the supplemental homestead deduction do now?

Section 45 of SEA 1 rewrote Indiana Code 6-1.1-12-37.5. For taxes first due and payable after December 31, 2025, the supplemental deduction equals the assessed value of the property as reduced by the standard deduction, multiplied by a percentage that rises each year: 40 percent for taxes payable in 2026, 46 percent for 2027, 52 percent for 2028, 57 percent for 2029, 62 percent for 2030, and 66.7 percent for taxes payable in 2031 and each year thereafter.

Two structural details matter. First, the supplemental is applied after the standard deduction but before any other deduction, exemption or credit, so its base shrinks as the standard deduction shrinks. Second, unlike the old version, there is no longer a break point at $600,000 of assessed value. The old law applied one percentage below $600,000 and a lower one above it. The new schedule applies a single percentage to the whole remainder.

Source: SEA 1-2025 enrolled act, Section 45, amending IC 6-1.1-12-37.5(a) and (c), iga.in.gov. Schedule restated in the DLGF memorandum of May 27, 2026, Section II.B.

Why do the two schedules never line up?

This is the part almost nobody explains, and it is why people miscompute their own bills. The two schedules are keyed to different clocks written into the statute itself.

The standard deduction schedule runs on the assessment date. The enrolled act phrases it “for assessment dates after December 31, 2024,” then lists the years 2025 through 2029. The supplemental deduction schedule runs on the payable year. The enrolled act phrases it “This subsection applies to taxes first due and payable after December 31, 2025,” then lists 2026 through 2031.

Indiana’s assessment date is January 1, and under Indiana Code 6-1.1-2-1.5 it sets the values for property taxes due and payable in the following calendar year. So the assessment-date year is always one behind the payable year. Put the two together and every bill combines a standard deduction from the prior year’s assessment date with a supplemental percentage from the current payable year.

Which numbers belong on which bill?

Source: SEA 1-2025 enrolled act, IC 6-1.1-12-37(c) and IC 6-1.1-12-37.5(c), iga.in.gov. Assessment date and payable year relationship per Ind. Code 6-1.1-2-1.5, as stated in the DLGF 2026 Assessment Calendar, February 18, 2026.

Does the total deduction get bigger or smaller?

On a property whose gross assessed value does not move, the combined deduction gets larger, not smaller. That is the trade the statute makes. The table below is arithmetic applied to a stated hypothetical, not a forecast of anyone’s bill, and it holds gross assessed value flat at $500,000 across all six years, which no real property does.

Illustrative arithmetic only, computed by the Steve Clark Team from the deduction schedules in SEA 1-2025, IC 6-1.1-12-37(c) and IC 6-1.1-12-37.5(c). Assumes a homestead with gross assessed value held constant at $500,000, no other deductions, exemptions or credits, and no change in law. Not a projection of any actual bill. Verify your own parcel with your county assessor.

Notice where this lands. By taxes payable in 2031, when the standard deduction is zero, net assessed value settles at 33.3 percent of gross assessed value before any other deduction, exemption or credit, because 66.7 percent of the full gross value has been deducted. That is a real distributional shift and it deserves to be stated plainly rather than framed as a win.

Does the benefit land the same way on every homestead?

Not yet, and not for the whole near-term window. Through taxes payable in 2030 the standard deduction is still a flat dollar amount, so it remains worth proportionally more to a lower-valued homestead, exactly as the old lesser-of test did at its cap. Run the payable-2026 schedule at both ends and the gap is visible. A $300,000 homestead nets to $151,200, which is 50.4 percent of gross. A $900,000 homestead nets to $511,200, which is 56.8 percent. The $500,000 case in the table above sits between them at 54.2 percent. Three homestead values, three different percentages, one year, one schedule.

The benefit converges to an identical percentage across all homestead values only from taxes payable in 2031, when the standard deduction reaches zero and the entire benefit is the flat 66.7 percent supplemental. Whether that convergence reads as an improvement depends entirely on where a given house sits, and it is not a question we can answer for you.

Illustrative arithmetic only, computed by the Steve Clark Team from the payable-2026 schedule in SEA 1-2025, IC 6-1.1-12-37(c) and IC 6-1.1-12-37.5(c): $48,000 standard deduction and a 40 percent supplemental applied to the remainder. Assumes no other deduction, exemption or credit. Not a projection of any actual bill.

Can the supplemental deduction hit its 75 percent ceiling?

The enrolled act states that the supplemental deduction may not exceed 75 percent of the gross assessed value of the property. It is a real limit in the statute, and it is worth understanding that under the schedule as written it cannot currently bind.

The reason is arithmetic. The supplemental is a percentage of gross assessed value minus the standard deduction, so its base is never larger than gross assessed value. The highest percentage anywhere in the schedule is 66.7 percent. Multiply a number no larger than gross assessed value by no more than 0.667 and the result is always below 75 percent of gross assessed value. The ceiling becomes operative only if a future General Assembly raises the percentage above 75 percent. Until then it is a guardrail with nothing behind it.

Source: SEA 1-2025 enrolled act, closing sentence of IC 6-1.1-12-37.5(c), iga.in.gov. The observation that the ceiling cannot bind under the current schedule is arithmetic applied to that text.

Did Senate Bill 1 change the 1, 2 and 3 percent caps?

No. We checked the enrolled act rather than relying on a summary. SEA 1 touches Indiana Code chapter 6-1.1-20.6, the circuit breaker chapter, in exactly three places: it amends section 3, it adds a new section 7.7, and it amends section 8.5. It contains no section amending Indiana Code 6-1.1-20.6-7.5, which is where the cap percentages live.

The Department of Local Government Finance states the caps as follows: property owners are entitled to a cap on the amount of property taxes over 1 percent of gross assessed value for homestead properties, 2 percent for other residential and agricultural land, and 3 percent for other real and personal property. DLGF also states that where voters have approved a referendum, those charges are exempt from the cap, which means a referendum raises the maximum a taxpayer can actually be charged.

The caps matter to how the deduction changes are felt, because a cap reduces a bill only when the calculated bill exceeds the cap. Where the cap is binding, changes in the deduction stack are absorbed by the cap and do not move the bill. Where it is not binding, they move the bill directly. Everything therefore turns on which side of that threshold a given parcel sits.

We cannot locate that threshold for you from a published rate, and neither can anyone else working from one. The certified gross district rate is the wrong instrument for the job for two reasons. Referendum levies sit inside that certified rate and are exempt from the cap, so part of the rate never counts toward the cap test. In the 2026 Hamilton County Budget Order, for example, Carmel Clay School Corporation carries two funds labeled REFERENDUM FUND – EXEMPT, at $0.1900 and $0.0500, both counted inside the certified Carmel district rate of 2.0167. The 2026 Boone County Budget Order shows the same structure for Zionsville Community Schools at $0.2444 and $0.0989, and for Lebanon Community Schools at $0.0913 and $0.1374. Second, local property tax credits are applied at step three of DLGF’s order of operations, ahead of the caps at step four, and we have not sourced the local income tax property tax relief credit rates for either county. Only the county auditor, working from your parcel’s actual deductions and credits, can tell you which side of the cap threshold you are on.

Sources: full-text check of the SEA 1-2025 enrolled act, which contains no section amending IC 6-1.1-20.6-7.5. Cap percentages and referendum treatment per Indiana DLGF, Tax Bill 101, retrieved August 2026. Exempt referendum fund rates and certified district rates per the 2026 Hamilton County Budget Order and 2026 Boone County Budget Order, both certified January 15, 2026. Order of operations per DLGF memorandum, May 27, 2026, Section IV.

What else did the law add that shows up on a bill?

Three additions are worth knowing, and one thing frequently attributed to Senate Bill 1 does not belong to it.

A new supplemental homestead credit. Section 74 of SEA 1 added Indiana Code 6-1.1-20.6-7.7, a credit equal to the lesser of 10 percent of the homestead’s property tax liability first due and payable for the calendar year, or $300. It applies to property taxes first due and payable in calendar years beginning after December 31, 2025, so it first appears on bills payable in 2026. Taxes imposed after voter approval in a referendum are excluded from the calculation. No application is required: the county auditor must identify eligible property and apply the credit.

A new deduction, but not for homesteads. Section 52 added Indiana Code 6-1.1-12-47, a deduction phasing in at 6 percent of assessed value for the 2025 assessment date and rising to 33.4 percent by the 2030 assessment date. It is easy to mistake for a homeowner benefit. It is not. It applies to property subject to the circuit breaker credit under IC 6-1.1-20.6-7.5(a)(2) through (a)(4), which is the 2 percent and 3 percent categories, not the 1 percent homestead category. DLGF’s own memorandum describes it as the deduction for 2 percent circuit breaker credit properties.

Two deductions converted into credits

The Over 65 Deduction was repealed as of the January 1, 2025 assessment date and replaced by an Over 65 Credit under IC 6-1.1-51.3-1 worth $150, with federal adjusted gross income limits of $60,000 on a single return and $70,000 on a joint return, or a combined $70,000 with others who share ownership, measured for the calendar year two years before the year taxes are first due and payable. The Blind and Disabled Deduction was likewise repealed and replaced by a credit under IC 6-1.1-51.3-2 worth $125, with no income limitation.

Both require an application filed with the county auditor on or before January 15 of the year the taxes are first due and payable, unless the county elects to transfer existing recipients automatically. That application is for the initial claim. DLGF states, for both credits, that an individual who received the credit and remains eligible in the following year is not required to file a statement to apply again in that following year. What replaces the annual filing is a reporting duty running the other way: an individual who receives the credit and becomes ineligible must notify the county auditor not later than 60 days after becoming ineligible. Seniors are routinely told to refile every January. That is not what the statute asks of them, and the duty they are not told about is the one that carries consequences.

SEA 1 separately raised the income ceiling on the Over 65 Circuit Breaker Credit, a different benefit under IC 6-1.1-20.6-8.5, from $30,000 and $40,000 to $60,000 on a single return and $70,000 on a joint return, and removed the previous $240,000 assessed value disqualifier for applications filed on or after January 1, 2025. Those $60,000 and $70,000 limits apply for taxes payable in 2026. Beginning with taxes payable in 2027, the thresholds are adjusted annually by an amount equal to the cost of living increase applied to Social Security benefits for the preceding year, and DLGF says it will publish the year’s figure by memorandum. That means the current year’s number cannot be read off a page like this one. Confirm it with the county auditor.

What is not from Senate Bill 1. The County Option Circuit Breaker Tax Credit under Indiana Code 6-1.1-49 predates it by two years; DLGF states that chapter took effect July 1, 2023. It lets a county fiscal body create a credit for qualified individuals in a designated neighborhood enhancement district who are 55 or older and have lived in the homestead at least 10 years. SEA 1 did create a separate County Option Homestead Property Tax Deferral Program under Indiana Code 6-1.1-52, effective July 1, 2025, letting an adopting county defer between $100 and $500 of a qualified individual’s homestead liability in a calendar year. Both are county options, and we have not confirmed adoption in either Hamilton or Boone County.

Sources: SEA 1-2025 enrolled act Sections 52, 74, 75 and 85, iga.in.gov. Credit amounts, eligibility, filing dates, continuing-eligibility rule, the 60 day ineligibility notice, and the Over 65 Circuit Breaker Credit income limits and their indexing per DLGF memorandum, June 12, 2025, Sections I, II and III. County Option Circuit Breaker Tax Credit effective date per DLGF memorandum, July 28, 2025. Deferral program per DLGF memorandum, September 18, 2025.

Did the 2026 session change any of this?

House Enrolled Act 1210-2026, signed March 12, 2026, left both homestead schedules alone. DLGF’s May 27, 2026 memorandum restates them unchanged. What HEA 1210 did do is worth knowing if you are moving.

It wrote the definition of principal place of residence into Indiana Code 6-1.1-12-37 as “an individual’s true, fixed, permanent home to which the individual has the intention of returning after an absence.” That definition had previously lived only in DLGF administrative rule. It also hardened enforcement. A person who fails to notify the county auditor within 60 days of becoming ineligible for the homestead deduction and still claims it shall, rather than may, be liable for the additional taxes plus a civil penalty of 10 percent of those additional taxes. Where an auditor determines property was not eligible, the auditor shall issue a notice including a 10 percent fine calculated on the taxpayer’s total tax bill as if the homestead deduction had never been applied. If you own a home in Carmel or Zionsville, buy a second one, and keep claiming the deduction on both, that is now a materially more expensive mistake. The 60 day clock is the part to write down.

HEA 1210 also changed who qualifies for the Over 65 Credit, and this is the change an over-65 seller most needs to see. Section 95, retroactively effective January 1, 2026, amended Indiana Code 6-1.1-51.3-1 to add a new eligibility requirement: the individual claiming the credit must reside on the real property, mobile home or manufactured home that will receive the credit. The statute carries an express carve-out. An individual may not be denied the credit for being absent from that property while in a nursing home or hospital. If an over-65 owner moves out of the homestead and keeps the property, residency is now the first thing to check, and the county auditor is the office to check it with.

HEA 1210 also fixed a conflict in the order of operations. DLGF’s published sequence for 2026 runs: exemptions, deductions, local property tax credits, property tax caps, then the Over 65 and Blind or Disabled and disabled veterans credits, then the supplemental homestead credit, then the Over 65 Circuit Breaker Credit and County Option Circuit Breaker Credit, then the County Option Homestead Relief Credit. Order matters, because each step operates on what the previous step left.

One item we are deliberately not summarizing: veterans’ property tax benefits changed three separate times across the 2025 and 2026 sessions, and the current structure begins with the January 1, 2026 assessment date, meaning bills payable in 2027. Any veteran should work from current DLGF guidance and a licensed Indiana tax professional rather than from any 2025-dated explanation, including a real estate team’s.

Source: DLGF memorandum, May 27, 2026, Sections I, II, III, IV and VI, citing HEA 1210-2026 Sections 54, 76, 77, 90 and 95.

What should a Hamilton or Boone County buyer or seller take from this?

Three things, and none of them is a dollar figure.

First, the mismatch of clocks means a listing conversation about “next year’s taxes” is almost always about two different years at once. The assessed value being discussed was set on a January 1 that has already passed. The deduction percentages being discussed apply to a bill not yet issued.

Second, the deduction stack is only one input. The certified district rate is the other, and it varies sharply inside the footprint. For taxes payable in 2026, the certified rate is 2.0167 in the Carmel district and 2.0336 in Zionsville Corporation, nearly identical, while Whitestown Corporation is 2.4583 and Lebanon Corporation is 1.8864. Two homes with the same assessed value in two of our towns do not carry the same bill, and Senate Bill 1 does not change that.

Certified district rates per $100 of net assessed value, 2025 assessment year payable 2026, with the prior year shown for comparison. These are gross district rates and include cap-exempt referendum levies. Source: Indiana DLGF, 2026 Hamilton County Budget Order and 2026 Boone County Budget Order, both certified January 15, 2026. Rates for taxes payable in 2027 have not been certified. Several towns span more than one taxing district; confirm yours with the county auditor.

Third, the revenue side is a projection, not a result. In April 2025 the Legislative Services Agency estimated that SEA 1 would change property tax net revenue for all units in Hamilton County by roughly negative $35.6 million in calendar 2026, negative $41.9 million in 2027 and negative $55.4 million in 2028, and for all units in Boone County by roughly negative $7.1 million, negative $6.6 million and negative $7.0 million across the same years. Those are estimates against a modeled baseline, prepared before the 2026 session amended parts of the scheme. They are not budget outcomes, and no actual figures have been published.

Source: Legislative Services Agency, Office of Fiscal and Management Analysis, Fiscal Impact Statement for SB 1 (Enrolled), LS 7244, prepared April 23, 2025, Appendix A, iga.in.gov. Estimates, not actual results.

One structural note that will shape the next several budget cycles: SEA 1 extended to calendar year 2026 the provision capping the maximum levy growth quotient at 1.04, meaning the growth factor local civil taxing units use in setting their maximum permissible levy is limited to 4 percent for that year. That is a constraint on the levy side, working alongside the deduction changes on the assessed value side.

Source: SEA 1-2025 enrolled act, Section 59, amending IC 6-1.1-18.5-2(e) and (f) to cover calendar years 2024, 2025 and 2026, with the last STEP taking the lesser of the computed result or 1.04. iga.in.gov.

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