Overview of Indiana Taxes
Indiana has relatively low property taxes. The average annual property tax paid in Indiana is $1,100. This is nearly half the national average. The statewide average effective property tax rate is 0.87%.
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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 Tax
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 $1,100. This is about half the national average. Before purchasing a property in Indiana, it’s 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.
The amount you will pay in property taxes will vary 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. We’ll walk you through those deductions, other important Indiana property tax rules and the county tax rates in Indiana.
Looking to calculate your potential monthly mortgage payment? Check out our mortgage calculator.
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 paid in two annual installments. One is due on May 10 and one is due on November 10.
As in most other states the Indiana property tax is ad valorem – 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 principal residences. The Supplemental Homestead Deduction is also for owner-occupied principal 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 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 .01. That’s $1,000,000 / $100,000,000.
That .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, the number to know is your effective tax rate –that is the total annual taxes paid as a percentage of home value. The table below shows the average effective tax rate for every county in Indiana.
|County||Median Home Value||Median Annual Property Tax Payment||Average Effective Property Tax Rate|
Marion County contains the city of Indianapolis and is the most populous county in Indiana. It also has the second highest effective tax rate of any Indiana county at 1.04%.
In 2017, total tax rates in the county ranged from a minimum of 2.2527 to a maximum of 5.5769. Those are the rates that apply after deductions such as the Homestead Standard Deduction have been subtracted from assessed value.
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 2017 total tax rate in Lake County District 3, which is in Gary, was 7.8939. That was the highest rate of any district in the state.
Taking all districts and all deductions into account, the average effective property tax rate in Lake County is 1.18%.
Compared to other urban counties in Indiana, Allen County has relatively low property tax rates. The 2017 median total rate among all tax districts in Allen County was 2.15 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 $1,077 per year, 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 over $230,000. As a result, property tax payments are also higher. In 2016, the median annual property tax payment in Hamilton County was $2,245, highest in the state. Tax rates are not quite as high, however. The average effective rate in the county last year was 0.98%.
Saint Joseph County
While the 2017 median total property tax rate in Saint Joseph County is 2.8 per $100 in net assessed value, some areas of the county have among the highest property tax rates in the state. Specifically, the five districts in the city of South Bent all have total rates of more than 5.5 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 as a percentage of median home value) is 1.01%, which ranks as the third highest rate in the state.
The typical homeowner in Elkhart County paid $1,156 annually in property taxes in 2016. While that is slightly higher than the state average ($1,100), it was about $1,000 less than the national average. The 2016 average effective property tax rate of 0.92% was the 12th highest in the state but is also lower than the national average.
Located in in southwest Indiana, Vanderburgh County has an average effective property tax rate of 0.88%, about average for the state. At that rate if your home is worth $150,000, you would pay just $1,320 annually in property taxes. Depending on where in the county you live however, you could pay more (or less) than that amount.
Total 2017 property tax rates in Tippecanoe County ranged from 1.0781 in Shelby Township to 2.7224 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. The 2016 average effective rate in Tippecanoe County was 0.77%.
The ninth most populous county in Indiana, Porter County sits on the shores of Lake Michigan to the east of Lake County. In 2016, it had the eighth highest average effective property tax rate in the state at 0.96%.
The median property tax payment in Hendricks County in 2016 was $1,650 per year, third highest in the state of Indiana. That is in part driven by high real estate values in the county (it has the sixth highest median home price of any Indiana county) but also by high tax rates. The average effective property tax rate in Hendricks County last year was 1.00%, which ranked as the fourth highest in the country.
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