Homestead Deduction

Owner-occupied homes on up to one acre are eligible for the homestead deduction. Homeowners do not need to reapply for this deduction unless there has been a change in deed, marital status, or change in the use of the property.

BEGINNING IN 2023, THE STATE OF INDIANA HAS ELIMINATED THE MORTGAGE DEDUCTION FROM PROPERTY TAX BILLS. THE $3,000.00 MORTGAGE DEDUCTION HAS BEEN ROLLED INTO THE HOMESTEAD DEDUCTION FOR ALL FUTURE TAX CALCULATIONS.

DOWNLOAD The Homestead Deduction Application Form.

FAQs

How do tax deductions work?

Tax deductions subtract a certain amount from the property's assessed value to arrive at the net assessed value. For example, let's say you own a home assessed at $180,000 and you qualify for the homestead deduction. Your standard homestead deduction is $45,000, and your supplemental deduction is $47,250. Without any deduction, the tax rate would be applied to the AV of $180,000. But with the homestead deduction, the tax bill is calculated based on a net AV of $87,750.

Who is eligible for the Homestead Deduction?

Owner-occupied homes on up to one acre are eligible for the homestead deduction. Taxpayers generally may receive only one homestead deduction, which is applied to their primary residence. This deduction consists of the standard homestead deduction (which, in most cases, totals $45,000 or 60% of the homestead assessed value) and the supplemental homestead deduction (which in most cases is calculated at 35% of the value after applying the standard homestead deduction). The Porter County Auditor's Office has a homestead compliance program designed to detect ineligible homestead deductions. Taxpayers who receive homestead deductions for which they are not eligible may be issued a corrected tax bill for the current tax year and are subject to up to three years of back tax payments and penalties, under Indiana law.

What is the deadline to apply?

In general, taxpayers must fill out, sign, and date the application form by December 31 in order for the deduction to be applied to the following year's tax bill. The completed form must be filed with the County Auditor's office by January 5. When applying, taxpayers should be prepared to provide proof of eligibility.

Once you apply for certain deductions, you generally do not need to re-apply as long as you continue to meet the eligibility requirements. (However, in the case of a refinancing, a new application for the mortgage deduction is required).

If you no longer qualify for a deduction, you must notify the Auditor's office within 60 days to get the deduction removed. In the case of the homestead deduction, a property owner who changes the use of the homestead property and who fails to file a certified statement with the county auditor is liable for the amount of the deduction received plus a civil penalty of 10% of the additional taxes due.

How do I apply?

As noted above, we recommend that taxpayers come in-person to our office to apply. Our staff will assist taxpayers to ensure their application forms are in proper order and that there is no missing or incorrect information that could result in a delay or rejection of the deduction. Our office will provide the application forms.

Taxpayers may also print out the application form (available on this page) and mail in their application. However, the application will not be processed if there is incomplete information or if the taxpayer does not provide proof of eligibility for each deduction. The type of verification depends on the deduction. For example, taxpayers applying for a homestead deduction may provide an updated government-issued ID with their current home address (most taxpayers provide an Indiana driver's license). For the Over-65 deduction, the taxpayer must provide a copy of their most recent tax return for us to review.

How many deductions are allowed?

Some deductions may be combined with others. Here is a general guide: