Values for Hoosier houses collectively rose by less than commercial and industrial properties, according to an annual ratio study. Photo from Getty Images.

By Leslie Bonilla Muñiz
Indiana Capital Chronicle

INDIANAPOLIS — Gross assessed values for commercial, industrial and residential properties throughout Indiana collectively rose 12% from 2024 to 2025, according to a statewide comparison chart assembled by the Department of Local Government Finance for property taxes due and payable in 2026.

The data is sourced from ratio studies performed annually by the state’s 92 county assessors.

“It is essentially a test of each assessor: how well are you doing? Are you doing this right?” said Larry DeBoer, a retired Purdue University agricultural economics professor and tax expert.

“Not very many … elected officials actually face a test like that. They’re being held accountable.”

Agricultural land, meanwhile, will be assessed at a lower base rate than the previous year, thanks to a provision in the behemoth tax plan Indiana lawmakers approved in April.

That’ll likely shift property tax burden toward other property types, DeBoer noted. That’s not the only shift, however.

The legislation also saves homeowners a collective $1.2 billion in property taxes over three calendar years, from 2026 through 2028, according to a fiscal analysis. It does so largely by creating a credit for 10% off every homestead’s bill, up to $300 each.

Local Residential Trends Reemerge

Commercial assessed value grew 16.07% in total, according to the study, ahead of industrial assessed value, which increased 15.59%.

Values for Hoosier houses collectively rose by less: 10.42%.

Lawmakers have, for years, promised cash-strapped homeowners that high assessed values and resulting skyrocketing property tax bills would naturally come down.

“I think we’re seeing some evidence” that values are growing more slowly, DeBoer said.

Relief could be on the horizon at last.

Gross assessed values don’t translate perfectly to property tax bills, however. County auditors will apply all deductions and credits to certify net assessed values, according to DLGF spokeswoman Jenny Banks.

DeBoer also observed a bigger variety in residential value growth than in recent years.

“Covid was a nationwide trend that affected every place — so maybe we’re not seeing a big nationwide or even statewide trend affecting home values now,” he posited.

“We’re back to: assessed value is a local issue,” DeBoer added. “And a local economy, and the local assessing practice, is what seems to be influencing the changes.”

Tax bill eases pressure on farmland

Indiana’s farmland is assessed differently.

DLGF calculates a rolling average using six years of capitalized net operating income and net cash rent. The highest value of the six is dropped from the formula, and the remaining five years are averaged to determine a base rate.

Another increase was in the cards for the base rate, to $2,390 per acre.

That would’ve come after several straight years of big jumps: from $1,500 in assessment year 2022 to $1,900 in 2023 and $2,280 in 2024.

Lawmakers intervened via Senate Enrolled Act 1, increasing the capitalization rate in the formula’s denominator to lower the base rate. Now, it’ll be $2,120 per acre, according to a DLGF memo.

“Yep, that was a victory for the (Indiana) Farm Bureau,” DeBoer quipped.

The formula averages six years to “iron out the blips,” he said, but it also can create a delay where assessed values may keep rising even as farm incomes and commodity prices are falling. The last high pandemic-era value, for example, won’t drop out of the formula until the end of the decade.

The average price of top-quality farmland was $14,392 per acre in 2024, according to a Purdue University Farmland Values survey. Average- and poor-quality farmland prices averaged $11,630 and $9,071, respectively.