Indiana 2026 Cost Tables: What Landlords Will See on Pay-2027 Tax Bills

The Department of Local Government Finance (DLGF) issued new cost schedules for the January 1, 2026 assessment date, and they will drive the property tax bills Indiana owners pay in 2027. According to DMA's analysis, the 2026 tables raised base costs 17% for apartments, 17% for office, and 49% for light manufacturing. Since 2021 the cumulative increases are 77%, 74%, and 130%.

Those percentages are not your tax increase. What reaches your bill depends on whether your building is valued strictly by cost, which cap tier it sits in, and whether your leases pass taxes through. For the mechanics of the reset itself, see our cost-schedule explainer; this post covers landlord cash flow.

What the DLGF Actually Changed for 2026

The DLGF's December 17, 2025 memo releases updated Craftsman-based schedules for the January 1, 2026 assessment date and holds the Verified Economic Modifier at its 2025 level. The 2025 modifier change was the bigger shock: Faegre Drinker described it as removing a downward adjustment, moving office base cost from $77.36 to $101.80 per square foot.

Costs then pass through a county Location Cost Multiplier. The October 31, 2025 LCM memo and county table keep Marion, Hamilton, and Hendricks at 100% but raise Lake and Porter from 95% to 99% and Martin from 87% to 92%. Add that table to your county analysis.

Why 5+ Unit Apartments Feel It First

Under IC 6-1.1-4-39, a residential rental with more than four units is assessed at the lowest of three values: cost, sales comparison, and income capitalization. Starting with 2024 assessments, subsection (f) requires assessors to calculate all three every year using DLGF cost schedules "without additional modifiers, adjustments, or other trending factors" beyond the LCM. Under subsection (g), the assessor carries the burden of proving the value is the lowest of the three.

So a cost-table increase flows straight into these buildings' cost-approach value. For Marion County, Faegre Drinker calculated the two-year base-rate increase at 58% for first-floor PAR 5 apartment space ($67.95 to $107.67 per square foot) and 34% to 49% for upper floors. Details: the second apartment jump.

The lowest-of-three rule is also your defense: if the income value is lower, it should control, and the Form 11-A reports all three values. For 1-4 unit rentals, IC 6-1.1-4-39(b) prefers the gross rent multiplier, and the DLGF memo directs annual adjustments "positive or negative" toward market, so sales matter more than the cost table.

How the 2% and 3% Caps Change the Bill

IC 6-1.1-20.6-7.5 limits the tax on residential property to 2% of gross assessed value. IC 6-1.1-20.6-4 defines residential to include non-homestead single-family homes and any building with two or more dwelling units, so a fourplex and a 300-unit complex sit in the same tier. Commercial real property, such as a strip center or small office, is capped at 3%. Hotels and motels are excluded from the residential definition. Referendum levies are outside the caps entirely (7.5(b)). Details are in our caps explainer.

SEA 1-2025 also added a deduction for 2%-tier property (IC 6-1.1-12-47). It doubles from 6% for pay-2026 to 12% for pay-2027 and reaches 33.4% by pay-2031, and the auditor applies it automatically. See the phase-in schedule.

Hypothetical example, round numbers. Take a complex with $2,000,000 of gross assessed value in a district with a $3.00 tax rate, and assume the rate does not change. The 12% deduction leaves $1,760,000 of net assessed value, which produces a $52,800 bill before the cap. The 2% cap is $40,000, so the owner pays $40,000. Now raise the gross value 17% to $2,340,000. The cap rises to $46,800, and that becomes the bill.

At the cap, the deduction does nothing (the cap is measured on gross value) and the bill tracks gross value one-for-one. Below the cap, the deduction helps. Rates will not actually hold: civil units' levies are limited by IC 6-1.1-18.5-3, so broad assessed-value growth lowers rates and shifts burden toward the classes that rose fastest. Our cap-exposure guide shows which side of the cap a parcel is on.

Passing Tax Increases Through to Tenants

Commercial owners with triple-net or expense-stop leases recover increases through the lease's tax clause, so check base years and whether reassessment-driven increases are recoverable before pay-2027 reconciliation. Residential landlords recover only through rent at renewal; what the market won't absorb comes out of net operating income, and documented NOI is the evidence for a 5+ unit income appeal. Our landlord software guide covers portfolio tracking.

When You Can Still Appeal

Under IC 6-1.1-15-1.1(b)(2), a Form 130 valuation appeal is due June 15 of the assessment year if the county mailed the Form 11 before May 1. If the county mailed it on or after May 1, the deadline moves to June 15 of the year the tax statement is mailed. For counties that mailed 2026 notices on time, the window to challenge the value itself closed June 15, 2026. If your county mailed late, you can still appeal a 2026 value until June 15, 2027.

Landlord Checklist for Pay-2027

1. Pull every 2026 Form 11 or 11-A. For 5+ unit buildings, compare the cost, sales, and income values and confirm the lowest one was used.
2. Check the mailing date. If it was May 1 or later, you can still file Form 130 until June 15, 2027.
3. Confirm the cap tier and the 12% deduction on each parcel when pay-2027 bills arrive.
4. Model the bill with and without the cap to see whether an assessed-value cut actually saves money.
5. Build the income file now (rent rolls, expenses, cap-rate support) for January 1, 2027. See our multifamily income approach, commercial income approach, and comparable sales guides.

Screen a portfolio's exposure with AribaTax investor tools, and when the numbers support it, our tax appeal service builds the case.