Indiana Property Taxes Climb as State Increases Base Cost Estimates

At a Glance

• For 2025 assessments, Indiana’s Department of Local Government Finance eliminated a downward adjustment (called a Verified Economic Multiplier) that previously applied to the Indiana cost tables, which, in turn, resulted in substantial increases in base costs. Because these base costs are typically the starting point for calculating a property’s assessed value in Indiana’s mass appraisal system, it affected most properties’ final assessed value as well.
• Assessment increases this year may generate sharp tax bill increases in 2026. Challenges to Indiana property tax assessment increases must be filed on or before June 16, 2025.
• Indiana’s behind-the-scenes administrative change has caused big increases in property tax assessments (and related liabilities) for many taxpayers. The financial implications of inaction can be significant, including the compounding effects of future assessments — and future increases in assessments — based on these higher base costs.

For the January 1, 2025, assessment date, Indiana property taxes are, once again, on the rise. Increases are hitting all property types — commercial (shopping centers, big box retail, office buildings), industrial (manufacturing, warehouse and storage), and residential (apartments, senior and assisted living, nursing homes) — even when the properties’ physical status and use, and the factors impacting their values, have not materially changed.

Why the Increases?

While there might be individual-property factors that also impact values, one significant reason for the across-the-board increases is that Indiana’s Department of Local Government Finance (DLGF) made a significant adjustment to one of the primary drivers of Indiana assessments: the cost data utilized by assessors throughout the state. The DLGF is the state agency responsible for implementing property tax assessment laws, rules and guidelines that are applied by assessing officials statewide. While assessors “apply” the Indiana assessment manual and cost guidelines, the DLGF develops the cost data and adjustments used in these publications.

For 2025 assessments, the DLGF eliminated a downward adjustment (called a Verified Economic Multiplier) that previously applied to the Indiana cost tables, which, in turn, resulted in substantial increases in base costs. Because these base costs are typically the starting point for calculating a property’s assessed value in Indiana’s mass appraisal system, it affected most properties’ final assessed value as well. Of course, Indiana’s cost guidelines are just one element assessors use to value taxpayers’ properties, and these increases in base costs do not — and should not — necessarily result in dollar-for-dollar increases in properties’ assessed values, particularly where the property’s market value has not increased.

The following examples show the substantial upward impact on certain base costs due to the DLGF’s adjustment:

These spikes in base costs for 2025 may translate into large increases in property taxes that will become payable in 2026.

What Can Taxpayers Do to Protect Themselves?

Assessment increases this year may generate sharp tax bill increases in 2026. Challenges to Indiana property tax assessment increases must be filed on or before June 16, 2025. (For some counties, like Marion County and Lake County, taxpayers generally may only appeal 2024 assessments based on tax bills; but for most counties’ taxpayers, the most recent assessments are for the 2025 assessment date.)

Appeals are first filed with the county assessor (or township assessor, if there is one in the jurisdiction), and taxpayers have an opportunity to work informally with assessing officials to find common ground for reductions. If the taxpayer and assessor cannot agree, a hearing may be held before the local county board. Most appeals are resolved at the local level; if not, taxpayers may continue appeals to the Indiana Board of Tax Review.

Final Thoughts

Indiana’s behind-the-scenes administrative change has caused big increases in property tax assessments (and related liabilities) for many taxpayers. 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 — and future increases in assessments — based on these higher base costs.

Property owners and other taxpayers are strongly encouraged to scrutinize their assessment notices and tax bills, and consult with experienced counsel if assessments appear excessive or inequitable.