Property Tax Exemptions You're Probably Not Claiming in Indiana

Indiana just made a significant change to how it calculates property tax relief for disabled veterans, and it isn't simply a bigger number across the board. Depending on your VA disability rating, you may come out ahead under the new system, or you may actually be getting less than you were under the old one. It's worth checking which side of that change you're on.

The general deduction, and a genuinely new automatic credit

Every owner-occupied primary residence in Indiana qualifies for the Homestead Standard Deduction, $40,000 off assessed value for 2026 taxes (payable in 2027), down from $48,000 the year before, plus a Supplemental Homestead Deduction of 40% of whatever value remains after that, capped at no more than 75% of the home's total assessed value. On top of both of those, a new Supplemental Homestead Credit, worth 10% of your tax bill up to $300, applies automatically starting with 2026 taxes; the county auditor applies it without any separate application. File the underlying homestead deduction once with your county auditor; you're only entitled to one, on your primary residence.

The one that caps how fast your bill can grow, for qualifying seniors

Homeowners 65 and older can qualify for Indiana's Over-65 Circuit Breaker, which caps how much your property tax can increase in a single year at 2%, once you're enrolled. The income eligibility for this one is genuinely tight compared to similar programs in other states, but the protection is permanent once you qualify: your bill can't jump sharply even in a fast-appreciating market.

The veteran benefit that changed shape, not just size

Here's the significant part. Before 2026, a veteran with a service-connected disability rating of 10% or higher received a deduction against their home's assessed value, scaling with their rating, up to roughly $24,900 depending on circumstances. Starting with 2026 taxes, most partially disabled veterans (in the 10-90% rating range) instead receive a flat-dollar credit against their tax bill, in a range of roughly $250 to $350 depending on the specific tier. For some veterans, especially those in higher-value homes, this new flat credit may actually be worth less than the old percentage-based deduction would have been. There's also a real limitation: if the credit exceeds what you owe, you don't get the difference back or carry it forward to next year. Totally disabled veterans, 100% permanent and total or rated at the Individual Unemployability level, come out ahead under the new system: a full property tax exemption with no cap on home value at all, an upgrade from whatever the old capped deduction provided. These veteran benefits stack on top of the homestead deduction and the new 10% credit; they don't replace them.

What to actually check

Confirm your 2026 property tax bill actually shows the new 10% homestead credit and, if you're a veteran, the correct credit or exemption tier for your rating. If you have a partial disability rating and a higher-value home, compare what your new flat credit is actually worth against what your old assessed-value deduction used to save you; for some veterans specifically, the new system is a step backward, not forward. If anything looks off, contact your county auditor before the bill becomes final.