The Indiana Senate Tax and Fiscal Policy Committee has approved a plan for property tax relief, although it’s a scaled-down version.
Among the provisions retained in the bill are relief for homeowners over age 65 and disabled veterans.
It also contains a first-time homebuyer tax credit that would last up to five years for homebuyers whose income is less than $75,000 for a home that is worth less than $250,000.
The bill freezes local property tax operating fund levies for property taxes paid in calendar year 2026, then imposes a 1% growth cap in 2027 and a 2% growth cap in 2028.
Starting in 2029, SB 1 implements a new levy growth formula intended to limit big year-to-year swings in levy growth.
Finally, SB 1 institutes a one-year “cooling off” period for capital project referendums, so taxpayers can see one year of savings on their property tax bills before deciding whether to approve a new referendum.
Under the scaled-down version, the total loss of revenue to local governments is now $687 million over three years.
The original version offered by Governor Mike Braun would have cost about $1.6 billion.
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