Overview of Indiana Taxes
Indiana has relatively low property taxes. The median annual property tax paid in Indiana is $1,130, which is almost half that U.S. average of $2,090. The statewide average effective property tax rate is 0.87%, compared to the national effective rate of 1.08%.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Indiana Property Taxes
Thinking about a move to the Hoosier State? Good news: Indiana has relatively low property taxes. In fact, the average annual property tax paid in Indiana is just $1,130. This is a bit more than half the national average.
The amount you'll pay in property taxes varies depending on where you live and how much your home is worth, but the statewide average effective property tax rate is 0.87%. Homeowners who live in their primary residence in Indiana are eligible for a number of deductions that can push rates below that average, though.
Before purchasing a property in Indiana, it might be a good idea to take a look at our mortgage guide. It includes important information about mortgage rates and key details about getting a mortgage in the Hoosier State.
A financial advisor in Indiana can help you understand how homeownership fits into your overall financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, retirement and more, to make sure you are preparing for the future.
How Property Taxes Work in Indiana
Real estate owners in the state of Indiana must pay taxes on their property every year. Taxes can be divided into two annual installments, with one being due on May 10 and the other on November 10.
As in most other states, the Indiana property tax is ad valorem, meaning it's based on the value of property. Each county has an assessor who is responsible for an annual assessment of every property in the county. This is done through a mass appraisal that looks at general property attributes like size and year of construction, as well as the prices of recent sales in the area, in order to determine the property’s market value.
The initial assessed value, which should be equal to your home’s market value, is called the gross assessed value. Once it has been determined, deductions are applied.
The most common deduction is the Homestead Standard Deduction, which is equal to 60% of the gross assessed value up to a maximum of $45,000. It is available for owner-occupied primary residences. The Supplemental Homestead Deduction is also for owner-occupied primary residences. This is equal to 35% of assessed value (after the Homestead Standard Deduction has been applied) up to $600,000 and 25% of assessed value over $600,000.
Once deductions have been subtracted, you are left with the property's net assessed value. This is the amount to which your local tax rates are applied.
Indiana Property Tax Rates
Tax rates in Indiana are recalculated every year by local tax authorities, such as schools, counties, townships and libraries. The rates are based on the total revenue the tax authority is allowed to collect (the levy) and the total tax base (the total value of net assessed value in the district).
So, for example, if a school district can collect $1,000,000 in revenue and the tax base is $100,000,000, the tax rate will be 0.01%. That’s $1,000,000 / $100,000,000.
That 0.01% is the nominal rate, which you apply to your net assessed value (after all deductions). To know how much you are paying in terms of your home’s value, pay attention to your effective tax rate, which is your total annual taxes paid as a percentage of your home's value. The table below shows the average effective tax rates, median home values and median property tax payments for every county in Indiana.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
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Marion County contains the city of Indianapolis, which is part of the reason why it's the most populous county in Indiana. It also has the second highest effective tax rate of any Indiana county at 1.05%.
In 2019, total tax rates in the county ranged from a minimum of 2.3641 to a maximum of 5.3449. Those are the rates that apply after deductions, such as the Homestead Standard Deduction, have been subtracted from assessed value.
If you have questions about how property taxes can affect your overall financial plans, a financial advisor in Indianapolis can help you out.
Lake County has the highest property taxes of any county in Indiana. This is in part because of high property taxes in the city of Gary. For example, the 2019 total tax rate in Lake County District 3, which is in Gary, was 8.6354. That was the highest rate of any district in the state.
Taking all districts and deductions into account, the average effective property tax rate in Lake County is 1.15%.
Compared to other urban counties in Indiana, Allen County has relatively low property tax rates. The 2019 median total rate among all tax districts in Allen County was 1.97 per $100 in net assessed value. In Fort Wayne, the second most populous city in the state, rates are around 3.4 per $100. As a result, the median real estate tax payment in the county is just $1,114 per year, which is slightly lower than the state average.
Hamilton County sits north of Indianapolis and is one of the fastest-growing counties in the country. It also has the highest property values of any county in Indiana, with a median home value of $240,000. As a result, property tax payments are also higher. The median annual property tax payment in Hamilton County was $2,343, highest in the state. Tax rates are not quite as high, however. The average effective rate in the county is 0.98%.
Saint Joseph County
While the 2019 median total property tax rate in Saint Joseph County is 2.69 per $100 in net assessed value, some areas of the county have among the highest property tax rates in the state.
More specifically, five of the six districts in the city of South Bend have total rates of more than 5.8 and each rank in the top 10 of Indiana’s 2,000 tax districts.
As a result, the average effective tax rate in St. Joseph County (median annual taxes paid as a percentage of median home value) is 1.01%, which is tied with Vigo County for the third highest rate in the state. However, on a nationwide scale, this tax rate compares reasonably well to the 1.08% U.S. average.
The typical homeowner in Elkhart County pays $1,208 annually in property taxes. That's slightly above the state average ($1,130), but it's well below the national average ($2,090). Elkhart's average effective property tax rate of 0.92% is tied for 10th highest in the state, it's 0.16% lower than the national average (1.08%).
Located in southwest Indiana, Vanderburgh County has an average effective property tax rate of 0.90%, about average for the state. At this rate, if your home is worth $150,000, you would pay just $1,350 annually in property taxes. Depending on where in the county you live, however, that amount may vary.
Total 2019 property tax rates in Tippecanoe County ranged from 1.1542 in Shelby Township to 2.903 in West Lafayette. Since those rates apply to net assessed value, homeowners who are able to claim the Homestead Standard Deduction and the Supplemental Homestead Deduction can expect to pay lower rates as a percentage of home value. Because of this, the average effective rate in Tippecanoe County is 0.76%.
The ninth most populous county in Indiana, Porter County sits on the shores of Lake Michigan to the east of Lake County. In 2018, it had the sixth highest average effective property tax rate in the state at 0.98%. This ties it with Hamilton County.
The median annual property tax payment in Hendricks County is $1,699, third highest in the state of Indiana. That is, in part, driven by high real estate values, as it has the sixth highest median home value of any Indiana county. At the same time, Hendricks also has high tax rates, though. The average effective property tax rate in Hendricks County is 0.99%, which comes in as the fifth highest in the state.
Property Tax: Which Counties are Getting the Best Bang for Their Buck
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most for their property tax dollars. To do this we looked at school rankings, crime rates and property taxes for every county.
As a way to measure the quality of schools, we analyzed the math and reading/language arts proficiencies for every school district in the country. We created an average score for each district by looking at the scores for every school in that district, weighting it to account for the number of students in each school. Within each state, we assigned every county a score between 1 and 10 (with 10 being the best) based on the average scores of the districts in each county.
For each county, we calculated the violent and property crimes per 100,000 residents.
Using the school and crime numbers, we calculated a community score. This is the ratio of the school rank to the combined crime rate per 100,000 residents.
We used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
Finally, we calculated a tax value by creating a ratio of the community score to the per capita property tax paid. This shows us the counties in the country where people are getting the most bang for their buck, or where their property tax dollars are going the furthest.
Sources: US Census Bureau 2017 American Community Survey, Department of Education, Federal Bureau of Investigation, State Police or Justice Department websites