A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an appropriation.

Budget Taxes

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Senator James Buck
Last action: 2026-01-08
Official status: Introduced Senate Bill (S)
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Homestead Property Tax Relief Act

This bill allows local governments to reduce property taxes for homeowners by lowering the homestead property tax cap, but requires them to replace lost revenue through other local taxes.

What This Bill Does

Allows counties, cities, and towns to lower the maximum amount of property tax that can be charged on homes (homestead property tax cap).
Requires any new taxes raised due to this reduction to only benefit the local government that made the change, not other taxing units.
Permits these local governments to introduce additional sales, income, innkeeper's, or food and beverage taxes if they lower the homestead property tax cap.

Who It Names or Affects

Homeowners in counties, cities, and towns who pay property taxes on their homes.
Local governments that decide to reduce homestead property tax caps or introduce new local taxes.

Terms To Know

Homestead Property Tax Cap: The maximum amount of property tax a homeowner can be charged for their primary residence.
Local Option Taxes: Taxes that local governments can choose to impose, such as sales taxes or income taxes.

Limits and Unknowns

The bill does not specify how much the homestead property tax cap can be reduced.
It is unclear which specific local governments will decide to use this new authority.

Bill History

2026-01-08 Senate
Authored by Senators Buck, Niemeyer
2026-01-08 Senate
First reading: referred to Committee on Tax and Fiscal Policy

Official Summary Text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an
appropriation.
Circuit breaker credits for homesteads.

Current Bill Text

Read the full stored bill text

A BILL FOR AN ACT to amend the Indiana Code concerning taxation and to make an
appropriation.

Circuit breaker credits for homesteads.

Authorizes the fiscal body of a county, city, or town (municipality) to reduce its homestead property tax cap. Requires the reduced property tax cap to apply only in determining the net property tax revenue of the municipality that adopted it and not to any other taxing unit within the taxing district. Authorizes a municipality that has adopted a reduced homestead property tax cap to adopt any of the following local option taxes, either singly or in combination, the revenue from which must be used as property tax replacement revenue due to the reduced homestead property tax cap: (1) Local option sales tax. (2) Supplemental local income tax. (3) Supplemental innkeeper's tax. (4) Supplemental food and beverage tax. Makes conforming changes and removes obsolete provisions. Makes an appropriation.