Owning a home in Indiana comes with a lot of perks, but one you might not be taking full advantage of is the Homestead Exemption. Along with a few other key property tax deductions, this exemption can lower your annual property tax bill and save you money. Let’s break down what the Homestead Exemption is, how it works, and what other deductions are available to homeowners in Indiana.
What Is the Homestead Exemption?
The Homestead Exemption is a property tax deduction that Indiana homeowners can claim on their primary residence. It helps lower the amount of assessed value used to calculate your property taxes, which means you pay less in taxes each year.
For example, if your home is valued at $200,000, the Homestead Exemption reduces the taxable portion of that amount. This is broken into two parts:
- Standard Deduction: Reduces the home’s assessed value by 60% or $45,000 (whichever is less).
- Supplemental Deduction: A further reduction of 35% if the home is worth less than $600,000 or 25% for homes worth more than $600,000.
By combining both deductions, you significantly lower your property tax obligation.
Who Qualifies for the Homestead Exemption?
To qualify for the Homestead Exemption, you must meet the following criteria:
- Ownership: You must own the home or be buying it under contract.
- Primary Residence: The home must be your primary place of residence (where you live most of the year).
- Filing Deadline: You must file for the exemption by December 31 to receive the benefit for the following year.
How to Apply for the Homestead Exemption
To apply for the Homestead Exemption in Indiana:
- Gather your information—this includes your property’s tax ID number and proof that the property is your primary residence.
- File the Homestead Deduction Application (Form HC10) with your county’s auditor. This can often be done online through the county assessor’s website.
- Once you file, the exemption remains in effect as long as you own and live in the home, so no need to reapply every year.
Check out these resources to get started:
Other Property Tax Deductions in Indiana
Aside from the Homestead Exemption, Indiana offers several other property tax deductions you may qualify for:
Mortgage Deduction
If you have a mortgage on your home, you can reduce your assessed value by up to $3,000. This deduction applies if you’re paying off a mortgage, a home equity line of credit, or even a reverse mortgage.
Learn more about the mortgage deduction here:
Senior Citizen Property Tax Deduction
Indiana offers a deduction for homeowners over 65 who meet specific income and home value criteria. If you’re a senior living on a fixed income, this could provide significant relief.
Find out more about the qualifications here:
Veterans Deduction
Veterans and their surviving spouses may qualify for property tax deductions in Indiana. The amount you can deduct depends on factors like your service-related disability rating and the type of discharge you received.
Read about the veterans deduction here:
Disabled Person Deduction
If you’re disabled, Indiana provides a property tax deduction for individuals who are permanently disabled. This deduction can also apply to certain qualifying blind homeowners.
Get more information on the disabled person deduction here:
How Much Can You Save?
The amount you save depends on your home’s assessed value and the combination of deductions you qualify for. For instance, homeowners benefiting from the Homestead Exemption and the Mortgage Deduction could see their taxable property value reduced by tens of thousands of dollars.
Keep Your Records Up to Date
It’s important to keep your exemption records up to date. If your primary residence changes, or if you refinance your home, you’ll need to update your application with the county auditor’s office. Failing to update your status could lead to back taxes and penalties.
Filing Deadlines to Remember
To qualify for deductions in a given year, you must apply by December 31 of the previous year. It’s a good idea to mark your calendar so you don’t miss out on any potential savings.
FAQs
1. Can I get the Homestead Exemption on a second home or rental property?
No, the Homestead Exemption only applies to your primary residence.
2. How do I know if my Homestead Exemption has been applied?
You can verify by checking your property tax bill or contacting your county assessor’s office.
3. What happens if I miss the filing deadline?
If you miss the December 31 deadline, you won’t receive the benefit for the following year, but you can still apply for future years.
4. Is there a maximum savings cap for the Homestead Exemption?
There isn’t a cap on savings, but the exemption only applies to your home’s assessed value, so higher-value homes may save more in raw dollars.
5. Can I combine multiple deductions?
Yes! For example, you can stack the Homestead Exemption with the Mortgage Deduction to lower your assessed value even further.
Conclusion
Navigating property tax deductions like the Homestead Exemption can feel daunting, but taking the time to understand your options can lead to significant savings. With a bit of planning and some help from local resources, you can reduce your tax burden and enjoy the perks of homeownership in Indiana.
