Indiana Property Taxes Explained: What You’ll Actually Pay

Whether you’re a first-time homebuyer or relocating to Indiana, understanding property taxes is essential to managing your housing costs. While Indiana is known for having relatively low property taxes compared to many states, there are still important nuances that can impact what you actually pay.

Here’s a clear breakdown of how Indiana property taxes work—and what to expect when buying a home in areas like Brownsburg, Hendricks County, and beyond.

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🧾 How Indiana Property Taxes Are Calculated

Indiana property taxes are based on your home’s assessed value, not necessarily its purchase price. Each year, county assessors determine this value based on market conditions, location, home improvements, and size.

Your tax bill is then calculated using:

Assessed Value × Tax Rate = Property Tax Due

Tax rates vary by county, township, and even school district. In Hendricks County, the average total rate tends to hover around 1% – 1.5% of assessed value.

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💸 The Tax Caps: What You’ll Never Pay More Than

Indiana uses “circuit breaker” caps, which limit how much you can be taxed:

• 1% of gross assessed value for owner-occupied primary residences
• 2% for rental/investment properties
• 3% for commercial properties

Example: If your Brownsburg home is assessed at $300,000 and it’s your primary residence, your tax bill will be capped at $3,000/year under state law—before exemptions or deductions.

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🏠 Key Exemptions That Reduce Your Bill

Indiana offers several property tax deductions that can significantly lower your taxable value:

• Homestead Deduction: Reduces your assessed value by up to $48,000 for your primary residence.
• Supplemental Homestead: Further reduces taxable value (based on a percentage).
• Mortgage Deduction: Up to $3,000.
• Over 65, Disabled Vet, and Blind/Disabled Deductions: For those who qualify.

These deductions can shave hundreds to thousands off your annual bill—especially when stacked together.

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📍 Brownsburg Example: What You’ll Actually Pay

Let’s say you buy a home in Brownsburg, in Hendricks County, for $350,000. After applying the Homestead and Mortgage deductions, your taxable value could drop to around $285,000.

With a tax rate around 1.2%, your estimated annual bill would be:

$285,000 × 1.2% = $3,420/year
(or $285/month)

Always check with the Hendricks County Auditor or your title company for exact estimates, as rates and deductions can vary.

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🧠 Pro Tips for Homebuyers & Sellers

• Buyers: Ask your agent or lender for a “property tax estimate” after deductions — don’t rely on listing sites.
• Sellers: Help buyers by confirming what exemptions are already in place or could be added.
• Investors: Know that rentals are taxed at a higher 2% cap, with no Homestead benefit.

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📌 Final Thoughts

Indiana’s property taxes are transparent and predictable—but not always obvious. With the right knowledge and exemptions, most homeowners in Brownsburg and throughout the state find their taxes manageable and fair.

Still unsure what you’ll pay? Let’s run the numbers together based on your exact address and ownership type.