Eligibility modifications for homestead tax exemption endorsed by Indiana House

STATEHOUSE – Legislation authored by State Rep. Cherrish Pryor (D-Indianapolis) modifying eligibility requirements for the homestead property tax exemption was unanimously approved today by members of the Indiana House of Representatives.

Homestead exemptions are typically allowed for homeowners using their homes as a primary residence. The exemption reduces the assessed value of the home on which property tax bills are based. In order to qualify, House Bill 1283 obligates property owners to transfer a property’s title to the purchaser upon contract finalization.

Homesteads receive substantial property tax deductions and are subject to the 1 percent property tax cap. Non-homestead residential property is subject to the 2 percent tax cap. HB 1283 doubles the limit of taxes that can be paid under the cap on these properties.

“This legislation aims to reduce tax fraud by property owners who have their renters file for the exemption on rental properties,” said Pryor. “Currently, there are a significant number of people playing the system to receive duplicate home deductions. Only contracts that require the property title to be conveyed will qualify the home as a homestead under this bill.

“There may be a small number of contracts that currently don’t require titles to be conveyed. In those cases, the properties will lose their homestead status along with the 1% cap on owed property taxes,” she added.

Co-authors of the bill are State Reps. Milo Smith (R-Columbia), Gregory W. Porter (D-Indianapolis), and Peggy Mayfield (R-Martinsville).

HB 1283 was approved by House members on a vote of 94-0 and now advances to the Senate for further legislative action.