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Senate Enrolled Act 1 (2025) is a broken promise to homeowners. Indiana Republicans swore property tax relief was coming, with Gov. Mike Braun making the issue central to his 2024 campaign. The buildup was real, but for many homeowners, the relief was not.
The uncomfortable truth is that SEA 1 was a blunder. Only 56% of homeowners saved money, leaving close to half of our homeowners with nothing. Those who did see a reduction didn’t save much. Our renters, most of whom are prospective first-time homebuyers, got nothing because inflation has rendered the renter’s deduction essentially useless.
And this is just the start. Over the next five years, the supplemental property tax deduction will increase as the standard deduction phases out. Lower-income Hoosiers will lose the $48,000 flat deduction that shields a sizable chunk of their home’s assessed value from taxation. The result: Homeowners with low-value homes could see their property taxes increase.
Those with deep pockets are the true winners under SEA 1. Wealthier families with higher-priced homes will benefit the most from these percentage-based deductions. Big businesses will continue to save as the property tax burden shifts from commercial real estate to homeowners.
Something most have missed is the new deduction on non-homestead properties. By 2029, businesses and wealthy homeowners will get a 30% deduction on any real estate that’s not a primary residence. This includes vacation homes, rental properties and office buildings. Wealthy, out-of-state homeowners will get a cut on their multimillion-dollar vacation homes along Lake Michigan. Yet, the average homeowner gets little in savings, and those most in need could actually see their taxes rise.
Republicans need to be honest with themselves. They’ve been backed into a corner by their own promises. Instead of proposing realistic, sound fiscal policy that benefits the whole, they’re content to burn the whole system down to benefit the few.
They need some help, and here are some potential solutions:
• First, we revive the state-funded homestead credit. In 2008, we gave $620 million in state-funded credits to offset rising assessments. Let’s do it again. Every homeowner in Indiana should receive a $300 credit or a 10% reduction on their bills, whichever is greater. This would cost the state only $250 million, which we can afford with our rising surplus.
• Eliminate or freeze the new non-homestead deduction. We don’t need more handouts for corporations or the ultra-wealthy. Allowing this deduction to exist will continue to shift the property tax burden to homeowners.
• Suspend property tax trending, aka annual assessments. We should look into a one-or two-year moratorium on assessed value changes. Homeowners need some breathing room as we find a happy medium between preserving market value and protecting taxpayers.
SEA 1 was a broken promise to the average homeowner, our local governments and our public schools. Indiana must and can do better. Homeowners deserve lasting, real relief from their leaders, not unachievable campaign promises that don’t lower their bottom line.•
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Porter is a Democrat serving his 17th term as the state representative for Indiana House District 96 in Indianapolis.
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Some good points are made here. In addition, our legislature (both parties) should elevate the property tax conversation to include all property owners. Because not-for-profit organizations (including churches) are exempt from paying property taxes, they contribute to higher taxes for both low-income property owners and those middle income and above. These not-for-profits receive property protection directly from police and fire services. They should minimally pay for the percentage of those costs relative to all taxing authorities. That would certainly help lower income property owners. Unfortunately, we are tending even further away from separation of church and state. Churches and other not-for-profits are exempt from taxes on revenue so they should be contributing something to protecting their property.