Marion County (Ind.) Assessor Adds Nearly $2 Billion of Assessed Value to Indianapolis Apartment Assessments, with More Increases on the Way — and Higher Tax Bills

At a Glance

• Indianapolis taxpayers must file appeals on or before June 15, 2026, to preserve their right to seek a reduction in their 2025 assessed value.
• Indiana’s behind-the-scenes administrative change for 2025 (raising taxes in 2026) has caused big increases in property tax assessments for many taxpayers. The DLGF’s second round of base rate increases in 2026 will ensure higher property taxes for many in 2027.
• Property owners and other taxpayers are strongly encouraged to scrutinize their assessment notices and tax bills, and consult with property tax counsel if assessments appear excessive or inequitable.

Large 2025 Base Rate Increases Bring Higher 2026 Tax Bills

Many owners and operators of apartments in Indianapolis will soon experience sticker shock when they receive their property tax bills this spring. For approximately 1,000 apartment complexes with 20 or more units, the Marion County Assessor’s Office has collectively increased assessed values by nearly $2 billion. The sharp increases are due, in part, to the Marion County assessor’s application of significantly higher base rates for improvements.

While many factors determine an individual improvement’s assessed value — including its age, size, design, condition, quality of construction materials and workmanship, among others — Indiana’s mass assessment system typically begins with the base rates determined by the Indiana Department of Local Government Finance (DLGF), the state agency responsible for implementing property assessment laws, rules, and guidelines. Without taxpayer input and in response to pressure from local assessing officials, the DLGF removed a sizeable adjustment for the January 1, 2025, assessment date (for taxes due and payable in 2026) that effectively increased the starting costs for all property types, including apartments. Removing the downward adjustment has generally resulted in higher assessed values — and corresponding higher property tax bills.

Appeals Due No Later Than June 15

Spring 2026 tax bills will reflect these increased costs over last year’s assessments. Most Indiana counties have already provided notice of 2025 assessments; however, for Indianapolis taxpayers, the tax bills are the official notices of these immense assessment increases. Preliminary values are available online, which are expected to largely remain unchanged. Thus, Indianapolis taxpayers must file appeals on or before June 15, 2026, to preserve their right to seek reductions in their 2025 assessed values.

A Two-Year Spike: More Base Rate Increases in 2026

Based on data recently made available, the DLGF has doubled-down, increasing base rates once again on apartments for the January 1, 2026, assessment date (for taxes due and payable in 2027) — creating enormous two-year jumps in base rate values. Instead of removing a negative adjustment, the latest increases are a result of the DLGF updating its cost tables using data from a third-party vendor, resulting in higher base construction costs.

The DLGF is delivering back-to-back substantial increases, which will impact apartment assessments in different ways, depending on an individual property’s specific characteristics and location; but the common thread for many taxpayers will be a second round of large increases, with correspondingly higher tax bills the following spring. The compounding impact of the DLGF’s back-to-back increases is illustrated in the following chart, reviewing the base rates for select assessment apartment scenarios — showing massive increases in base rates over two years.

Note: “PAR” stands for “perimeter-to-area ratio,” a factor used to convert the vertical cost of a structure into a dollar amount per square foot. “PSF” stands for “per-square-foot.”

Indiana Law Requires Assessments to Be the Lowest of the Three Approaches to Value

Indiana recognizes the importance of managing excessive property tax assessments for apartments, where tenants struggling with affordability concerns cannot — and should not — be worried about large property tax assessment increases, which likely will be passed along to them.

The Indiana General Assembly mandates that an apartment complex of more than four units shall be valued at the lowest of the three approaches to value: the cost approach, the sales comparison approach, and the income capitalization approach. Excluding certain low-income housing, assessors statewide are obligated to calculate the value for each apartment complex of five units or more using all three approaches to value, to advise owners and operators as to each calculation, and to apply the lowest of the three approaches.

When asked, any assessor’s office (including Marion County) should be able “to show their work” by explaining the data and methodologies applied to determine each estimate of value. The cost approach, especially for older properties, will often be the lowest of three approaches to value. With higher base rates and an assessor unconditionally embracing and applying those higher starting values, the “lowest of three” values is not quite so low, and it continues to go up, to the detriment of owners, operators — and ultimately tenants throughout Marion County.

Indianapolis taxpayers should review their assessments and tax bills to ensure the assessor’s valuations are consistent with Indiana law and the factors impacting the property’s value.

Final Thoughts

Indiana’s behind-the-scenes administrative change for 2025 (raising taxes in 2026) has caused big increases in property tax assessments (and related liabilities) for many taxpayers. The DLGF’s second round of base rate increase in 2026 will ensure higher property taxes for many in 2027.

Property taxes are one of the largest single expenses of property ownership aside from debt service. The financial implications of inaction can be significant, including the compounding effects of future assessments based on these higher starting costs. Property owners and other taxpayers are strongly encouraged to scrutinize their assessment notices and tax bills, and to consult with property tax counsel if assessments appear excessive or inequitable.