Indiana's gross assessed values for commercial, industrial, and residential properties collectively rose 12% from 2024 to 2025, according to data from the Department of Local Government Finance. This is the assessment driving your property taxes payable in 2026 — and the increase wasn't evenly distributed.
Commercial property assessments surged the most. Residential values grew more modestly. And the interplay between rising assessments, SB 1's levy freeze, and circuit breaker caps creates a complicated picture for what individual property owners will actually pay.
The Numbers by Property Class
Not all property types saw the same growth. The divergence is significant:
Why Commercial Led the Way
Commercial property — which includes offices, retail, and apartment complexes — saw the largest jump for two reasons:
-
DLGF base rate adjustments: The Department of Local Government Finance removed a long-standing downward adjustment to its cost tables, which had been suppressing assessed values below replacement cost. Removing the adjustment snapped values upward.
-
Market appreciation: Commercial real estate in Indiana's metro areas has seen genuine market growth, particularly in the multifamily sector. Indianapolis alone saw nearly $2 billion in new apartment assessed value.
Residential: Steady but Significant
A 10.4% increase in residential assessed values is substantial — it means the typical Indiana home's assessed value rose by roughly $15,000-$25,000 in a single year. For homeowners already near the circuit breaker cap, this may not translate to a proportional tax increase. For others, it will.
The residential increase reflects both the DLGF's cost table changes and continued home price appreciation across much of the state. Indiana's fastest-growing counties — particularly suburban counties around Indianapolis — saw residential growth well above the 10.4% statewide average.
What It Means for Your 2026 Tax Bill
A 12% rise in assessed values doesn't necessarily mean a 12% rise in tax bills. Several factors moderate the impact:
The SB 1 Levy Freeze
Senate Bill 1 froze local government levies at 2025 levels for 2026. This means the total dollars collected by each taxing unit cannot increase, even as the assessed value base grows.
When the levy stays the same but the tax base grows, tax rates fall. If a county's assessed values grew 12% but its levy is frozen, the effective tax rate drops by roughly the same proportion. In theory, your bill on the same property stays roughly flat.
In practice, the math is more nuanced. Not all properties within a taxing district grew at the same rate. Properties that grew faster than average will see higher bills even with flat levies. Properties that grew slower will see lower bills.
Circuit Breaker Dynamics
Indiana's circuit breaker caps taxes at:
- 1% of assessed value for homesteads
- 2% for residential rental and agricultural
- 3% for commercial and industrial
When assessed values rise, the dollar amount of the cap rises too. A homestead previously valued at $200,000 had a cap of $2,000. At $220,000, the cap is $2,200. The circuit breaker doesn't prevent tax increases — it just limits them proportionally to assessment growth.
For properties already hitting the cap, the tax increase is limited to the percentage growth in assessed value (10.4% for residential). For properties below the cap, the increase depends on the complex interaction between their specific assessment growth, levy changes, and rate adjustments.
New SB 1 Credits and Deductions
The new 10% homestead credit (max $300) and increased supplemental deduction (40%, up from 35%) partially offset assessment growth. For a typical homeowner, these provisions reduce the net impact of the assessment increase — but they don't eliminate it entirely.
County-Level Variation
The 12% statewide figure is an average. Individual counties experienced very different growth rates depending on their mix of property types, local market conditions, and how their assessments were calibrated before the DLGF base rate changes.
High-Growth Counties
Counties in the Indianapolis metro area and other growing markets saw the largest increases. Hamilton County, Hendricks County, Boone County, and Johnson County — all suburban counties with strong residential development — experienced residential growth well above the statewide average.
Marion County saw enormous commercial growth driven by the apartment reassessment, even though residential growth was more moderate.
Allen County (Fort Wayne) and Elkhart County in northern Indiana also posted strong growth reflecting both cost table adjustments and genuine market appreciation.
Moderate-Growth Counties
Many mid-size Indiana counties — Tippecanoe (Lafayette), Monroe (Bloomington), Vigo (Terre Haute) — saw growth closer to the statewide average. University towns and regional centers generally tracked the 10-12% range.
Lower-Growth Counties
Some rural counties with declining populations and weaker housing markets saw more modest increases. In these areas, the cost table adjustments were the primary driver rather than market appreciation, and the adjustments were smaller in magnitude because base values were already lower.
The DLGF Base Rate Factor
A significant portion of the statewide increase is attributable to the DLGF's decision to update its cost tables and remove downward adjustments. This is worth understanding because it affects the appeal calculus.
The DLGF uses cost tables from a third-party vendor to establish replacement cost estimates for different property types. For years, the agency applied a downward adjustment factor that reduced these estimates — acknowledging that replacement cost doesn't perfectly reflect market value in many areas.
For the 2025 assessment date, the DLGF removed this downward adjustment. The result was a mechanical increase in assessed values across the board, independent of any change in actual market conditions.
This distinction matters for property owners considering an appeal. If your assessed value jumped 15% but comparable sales in your area only increased 5%, the gap may represent a cost-table-driven increase that doesn't reflect your property's actual market value. That's a valid basis for a Form 130 appeal.
Assessment Equity: Who Bears the Burden?
A 12% average increase masks wide variation between individual properties. Some properties may have seen 5% increases while their neighbors saw 20%. When assessments grow unevenly, the tax burden shifts — properties with above-average growth pay a larger share of the fixed levy.
This is where assessment equity metrics like the COD score become relevant. A well-calibrated assessment system would increase all similar properties by similar percentages. When the increases are uneven, it suggests some properties are being over- or under-assessed relative to their peers.
AribaTax's Assessment Equity tools analyze assessment uniformity at the neighborhood level, helping identify properties that may be bearing a disproportionate share of the tax burden.
What Should You Do?
1. Check Your 2025 Assessment
Your spring 2026 tax bill reflects your January 1, 2025 assessed value. Compare it to your 2024 value. If the increase is significantly above the county average, investigate further.
Use AribaTax's Property Lookup to see your assessment alongside comparable properties in your area. If your increase looks disproportionate, you may have grounds for an appeal.
2. Understand Your Bill
When your 2026 bill arrives, don't just look at the bottom line. Read each line item to verify that deductions, credits, and the tax rate are all applied correctly. Our guide to reading your tax bill walks through every section.
3. Consider an Appeal
The appeal deadline is 45 days after the assessment notice or June 15, whichever is later. If comparable sales data suggests your property is over-assessed, our Tax Appeal Automation can analyze your property and handle the Form 130 filing.
4. Verify SB 1 Benefits
Make sure your 2026 bill reflects the new SB 1 provisions: the 10% homestead credit, the 40% supplemental deduction rate, and any applicable senior or disabled credits.
Looking Ahead: 2027
The DLGF has already increased base rates again for the January 1, 2026 assessment date (taxes payable in 2027) — particularly for apartments and commercial property. The SB 1 levy freeze is a one-year measure for 2026 only.
Without the levy freeze in 2027, local governments will be able to increase levies again. Combined with continued assessment growth, 2027 tax bills could see larger increases than 2026 for many property owners.
Property owners should plan for continued assessment growth and consider annual appeals if their values consistently exceed market evidence.
Related Reading
- Indiana SB 1 property tax reform — New credits, deductions, and the levy freeze
- Indianapolis apartment assessment surge — $2B in new commercial assessed value
- Fastest-growing counties by property value — Where values are rising fastest
- What is a COD score — Measuring assessment equity
- Most over-assessed counties — Where assessments deviate from market value
- How to appeal your assessment — Step-by-step Form 130 guide
Explore Your County's Data
See how assessments changed in your area:
- Marion County — Indianapolis
- Hamilton County — Carmel, Fishers
- Allen County — Fort Wayne
- Lake County — Gary, Hammond
- Hendricks County — Plainfield, Brownsburg
- Elkhart County — Elkhart, Goshen