Effective rate, median annual bill, homestead exemption, and assessment cap rules under Ind. Code § 6-1.1-12-37
Median bill is the actual ACS 2022 figure for owner-occupied housing units in Indiana. Your specific bill will vary by county and municipality — local mill rates can swing the effective rate by 30%+ within a single state.
The effective property tax rate is the single most important fixed operating expense for buy-and-hold rental property. At 0.71%, every $100,000 of Indiana property value generates approximately $710 in annual property tax — money that comes off the top before any other expense, debt service, or vacancy reserve.
Indiana's effective rate of 0.71% is roughly in line with the U.S. median (~1.02%). Within the state, however, county and municipal mill rates can vary widely — always verify the actual bill from the county assessor before underwriting.
Standard deduction lesser of $48,000 or 60% of AV; supplemental deduction further reduces taxable value. Property tax cap: 1% of gross AV for homesteads.
The exemption is granted under Ind. Code § 6-1.1-12-37. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
The effective property tax rate in Indiana is 0.71% of fair market value, according to Tax Foundation analysis of U.S. Census Bureau ACS 2022 data published in 2024. The median Indiana homeowner pays $1,497 annually in property taxes. That is approximately 70% of the U.S. national median effective rate of 1.02%.
Standard deduction lesser of $48,000 or 60% of AV; supplemental deduction further reduces taxable value. Property tax cap: 1% of gross AV for homesteads. Statutory authority: Ind. Code § 6-1.1-12-37.
Generally no. Homestead exemptions, primary-residence assessment caps, and senior/disabled credits in Indiana apply only to owner-occupied primary residences. Rental properties are typically taxed at full assessed value with no cap on annual reassessment growth, unlike owner-occupied homes which benefit from the 1% of gross AV.
Local assessors determine fair market value (or taxable value, depending on the state). The taxable value is then multiplied by the local millage rate set by counties, municipalities, school districts, and special districts. Indiana's effective rate of 0.71% reflects the combined burden of all local taxing jurisdictions on the underlying market value of the property.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: Ind. Code § 6-1.1-12-37. Last updated April 29, 2026. For informational purposes only — not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
