On owner-occupied homes, Indiana's effective property tax rate is 0.76%, against 1.88% in Illinois, 1.36% in Ohio, and 1.19% in Michigan. Kentucky, at 0.74%, is the only neighbor that comes in lower. Those figures come from the Tax Foundation's Property Taxes by State and County, 2026. The Foundation divides total real estate taxes paid by total home value for owner-occupied housing, using Census American Community Survey (ACS) 2020–2024 5-year data (tables B25090 and B25082).
State averages hide local variation, and each state limits taxes through a different mechanism. For border-county buyers, the county figures and the rules both matter.
State-by-State Property Tax Comparison
| State | Effective rate (TF, ACS 2020–24) | Rank of 50 | Median tax paid | Median home value |
|---|---|---|---|---|
| Illinois | 1.88% | 2 | $5,298 | $263,300 |
| Ohio | 1.36% | 8 | $2,822 | $214,800 |
| Michigan | 1.19% | 14 | $2,904 | $231,600 |
| Indiana | 0.76% | 29 | $1,614 | $218,200 |
| Kentucky | 0.74% | 31 | $1,544 | $205,600 |
The median columns come from the same ACS 2020–2024 tables (B25103, B25077), retrieved through Census Reporter. We recomputed the rates from the aggregate tables, and they match the Foundation's published figures.
Border Counties: Indiana vs. the Metro Across the Line
Source: Tax Foundation 2026 county table (ACS 2020–2024 5-year).
| County | Median value | Median tax paid | Effective rate |
|---|---|---|---|
| Lake, IN | $230,600 | $2,112 | 0.93% |
| Porter, IN | $281,500 | $2,326 | 0.81% |
| Cook, IL | $324,500 | $6,191 | 1.73% |
| Lake, IL | $345,700 | $8,923 | 2.26% |
| Will, IL | $319,600 | $7,173 | 2.10% |
| Dearborn, IN | $243,400 | $1,789 | 0.72% |
| Hamilton, OH | $241,900 | $3,652 | 1.51% |
| Boone, KY | $277,300 | $2,372 | 0.84% |
| Kenton, KY | $244,400 | $2,395 | 0.96% |
| Clark, IN | $222,900 | $1,716 | 0.71% |
| Floyd, IN | $251,000 | $1,736 | 0.66% |
| Jefferson, KY | $248,400 | $2,136 | 0.85% |
| Elkhart, IN | $210,400 | $1,717 | 0.82% |
| St. Joseph, IN | $192,800 | $1,665 | 0.85% |
| Berrien, MI | $224,300 | $2,429 | 1.02% |
| Cass, MI | $218,000 | $2,116 | 0.93% |
Lake County, Indiana has the highest rate on the Indiana side (see our Lake County cap-loss analysis), yet its median bill is roughly a third of Cook County's. County detail: Dearborn County, Floyd County, Clark County, Porter County, and Elkhart County.
Why the Numbers Differ: Five Different Rulebooks
Indiana: a hard cap on the bill. Article 10, Section 1 of the Indiana Constitution and IC 6-1.1-20.6 cap each tax bill at 1% of gross assessed value for a homestead, 2% for rentals and farmland, and 3% for other property. Voter-approved referendum levies sit outside the caps. Assessments track market value every year (IC 6-1.1-4-4.5); the bill cap, not a value freeze, is the protection. See our caps and circuit breakers explainer.
Illinois: high rates and classification in Cook County. Outside Cook County, property is assessed at 33 1/3% of fair cash value (35 ILCS 200/9-145). Cook classifies property and assesses homes at 10% of market value, and it reassesses on a triennial cycle by region. The general homestead exemption reduces equalized assessed value by $10,000 in Cook County, $8,000 in the counties that border it, and $6,000 elsewhere (35 ILCS 200/15-175). Illinois has nothing like Indiana's percentage-of-value cap on the bill.
Ohio: reduction factors and rollbacks that are now changing. HB 920, a 1976 law now codified at ORC 319.301, applies "tax reduction factors" so that most voted levies collect the same dollars from existing property when values rise (LSC explainer). Ohio also gave a 10% rollback to non-business property plus 2.5% to owner-occupied homes. HB 186 rewrites both starting in tax year 2026 (LSC analysis): the residential 10% steps down to 7.5%, 5%, 2.5%, then 0% in 2029, while the owner-occupancy rollback rises to 5.70%, 8.92%, 12.15%, then 15.38% (ORC 319.302, 323.152). Owner-occupants go from 12.5% to 15.38%; rentals lose the rollback. Both apply only to "qualifying levies," mainly those approved before September 29, 2013 or within the ten-mill limit.
Michigan: Proposal A's taxable value cap and the PRE. Since voters approved Proposal A in 1994, taxable value can grow each year by no more than inflation or 5%, whichever is lower. For 2026 the State Tax Commission set the multiplier at 1.027 (City of Portage summary). The cap lifts after a sale: the year after a transfer, taxable value resets to state equalized value (50% of true cash value). The Principal Residence Exemption exempts an owner's home from local school operating millage of up to 18 mills.
Kentucky: limits on revenue, not on the bill. HB 44 (1979 special session) set the framework. Under KRS 132.027 (cities and urban-county governments), with parallel provisions for other districts such as KRS 132.023, a government that sets a rate above its "compensating" rate (the rate that would raise the same revenue as the year before) must hold a hearing. Any part of the rate that would raise more than 4% above the compensating rate's revenue from existing real property is subject to a recall vote (KRS 132.017). The rule limits how fast total revenue can grow; it puts no ceiling on any one bill.
Warning
These averages describe existing owners, not new buyers. Michigan's cap resets on sale, and Ohio's reduction factors shield long-time owners from reappraisal increases, so a buyer's first bill can run well above the average. Get the specific parcel's current tax.
What This Means for Border-County Buyers
- Lake/Porter vs. Chicagoland: the region's largest gap: 0.81% to 0.93% versus 1.73% to 2.26%.
- Dearborn vs. Cincinnati: 0.72% is less than half of Hamilton County's 1.51%; Northern Kentucky is closer.
- Clark/Floyd vs. Louisville: both run below Jefferson County's 0.85%, though Kentucky edges Indiana statewide.
- Elkhart/St. Joseph vs. southwest Michigan: 0.82% to 0.85% versus 0.93% to 1.02%, before Michigan's post-sale uncapping.
Note
Indiana's homestead deduction and the 1% cap apply only after you file for the homestead. File by January 15 of the year after you buy, and see the homestead guide for details. If lower property taxes change whether you itemize, check how the federal SALT cap applies to you.
Next Steps Before You Buy Across the Line
- Compare the actual parcel's current bill, not the state rate. You can look up any Indiana parcel with our property lookup.
- Check the local district rate in our Indiana rates by county table.
- Confirm the homestead filing at closing, using our moving to Indiana guide.
- If your first Indiana assessment looks high, start an appeal.