On Wednesday, the Indiana House of Representatives discussed legislation originally proposed as Gov. Mike Braun’s campaign proposal to lower property taxes for homeowners. Earlier this week, State Rep. Jeff Thompson (R-Lizton) introduced an amendment that stripped a provision from the Senate version of the bill giving first time homebuyers a tax credit in the House Ways and Means Committee. State Rep. Ed Delaney (D-Indianapolis) reintroduced the credit in an amendment that was unanimously struck down on the floor of the House Representatives by all Republican members of the chamber that voted (Photo Credit Monroe Bush/Indiana Capital Chronicle).
The amendment would have provided a credit for five years of up to $2,500 or the property tax liability of first-time home buyers with household incomes below $75,000 per year and assessed home values of $250,000 or less. Studies have concluded that the lowest 20% of Hoosiers by income paid more than twice the property tax rate of wealthier families as a percentage of income, which some have cited as a justification for the credit.
Thompson, however, suggested that the credit would reduce tax revenue for local schools.
“House Republicans claimed including a tax credit for first time homebuyers would harm our educational system, but had no concerns about forcing public schools to share property tax revenue with charter schools, which are run by appointed boards rather than members elected by the community,” said Bonnie Kallis, chair of the American Solidarity Party of Indiana. “The hypocrisy is astounding. Large corporations will continue to get tax breaks while young Hoosier families will continue to be priced out of the housing market.”
One of the most significant changes to the bill in addition to the elimination of the credit was a significant increase to amount of business personal property corporations can own before being subject to the business personal property tax, from $115,000 to one million dollars-worth for the 2025 assessment date and from $150,000 to two million dollars-worth for the 2026 assessment date and each year following.
“Instead of giving parts of industry massive breaks, we should be looking to support young Hoosiers as they strive to achieve homeownership,” said Delaney. “Supporting young Hoosiers will not only boost our economy and grow our workforce but increase the property tax base itself.”
The bill also expands the ability of localities to implement a local income tax but caps certain other local income tax rates.
“Now they get to put $1.4 billion in tax cuts on their mailers while homeowners will save an average of $245,” said State Rep. Greg Porter (D-Indianapolis). “Those savings will be zeroed out with local income tax increases.”
Gov. Braun quickly signaled his support for the amended bill over X after it was amended to raise the business personal property tax exemption and asked for the Senate to concur with the changes.