Pryor bill reducing homestead tax fraud moves to Gov. Pence for final OK

STATEHOUSE – Legislation authored by State Rep. Cherrish Pryor (D-Indianapolis) that would prevent homestead tax fraud is moving on to Governor Mike Pence for his final approval.

Members of the Indiana Senate unanimously passed House Bill 1283 this week, which requires a property’s title to be conveyed once all obligations of the land contract sale have been fulfilled. Current law allows land contract buyers to qualify for the homestead deduction. Since Senators made no changes to the legislation, it goes straight to Gov. Pence for his consideration.

“This bill aims to reduce tax fraud by property owners who have their renters file for the exemption on rental properties,” Pryor said. “Homestead deductions are supposed to be claimed only by homeowners who use and live in their homes as a primary residence.

“We want to prevent people from playing the system to receive duplicate home deductions. Homestead fraud causes higher tax bills for all Hoosiers,” she added.

Currently, homesteads receive substantial property tax deductions and a 1% cap on property taxes. Other residential property is subject to a 2% tax cap and ineligible for most property tax deductions, including the homestead deduction.

Properties that fail to convey their titles will lose the homestead status and 1% cap on owed property taxes.

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