Proposed bill could temporarily lower Indiana property tax cap

LOUISVILLE, Ky. (WDRB) -- Indiana homeowners could pay less on their property tax bills if temporary relief passes this legislative session.

House Bill 1499, which has already passed the House, would temporarily reduce Indiana's statewide cap on residential property taxes.

Right now, it stands at 1%, but the bill would lower that to .95% for taxes due and payable in 2024, and then to .975% in 2025.

Lawmakers supporting the bill believe it will be much welcomed relief as home values have shot up, and so have property tax bills.

"It will help those homeowners and not have such a large increase," Rep. Jeff Thompson, R-Lizton, said.

But others are worried about the impact it could have if the tax cap is lowered.

Property taxes are the primary revenue source for local governments and schools. A decrease over the next two years could impact things like salary increases for government workers.

Rep. Ed DeLaney, D-Indianapolis, said that while he supports the bill, the state's property tax system needs to change long term.

"Put simply, our 1% property tax cap, our system is showing its age," DeLaney said, suggesting the state cover more funding for schools.

"The taxes could be used if we relieve the pressure on the schools by giving them more taxes from the state, more revenue from the state, that would create funds to fix things like roads and hire police," he said.

The bill has been sent to the state Senate for consideration.