A Senate Committee this morning passes property tax relief authored by  Sen, Travis Holdman.

The Tax and Fiscal Policy Committee passed SB 1, which supporters say was  the very real needs of relief for homeowners with the budget realities of local governments.

As it passed committee, SB 1 includes multiple policies to limit property tax growth for all Hoosiers, including reforms to the referendum process, along with specific property tax relief for homeowners and farmers. Most significantly, SB 1 would freeze local operating fund levies in 2026. All told, this package is projected to save Hoosier taxpayers $1.4 billion on their property tax bills over the next three years.

Provisions in the Senate Republican Property Tax Cut Plan

Limitations on property tax growth for all Hoosiers

  • SB 1 freezes local property tax operating fund levies for property taxes paid in calendar year 2026, then imposes a 1% growth cap in 2027 and a 2% growth cap in 2028.
  • Starting in 2029, SB 1 implements a new levy growth formula intended to limit big year-to-year swings in levy growth.
  • SB 1 limits local governments’ ability to go above the annual maximum operating levy growth cap. Instead, local officials will have to pursue a referendum, so voters can decide whether to approve extra levy growth.
  • SB 1 ends automatic levy growth by forcing local governments to have a separate public meeting and have a stand-alone vote on annual levy increases.

Relief for homeowners

  • SB 1 creates a new $2,500 property tax credit for first-time homebuyers, with a home value cap of $250,000 and an income cap of $75,000.
  • SB 1 expands eligibility for the existing disabled veteran property tax deduction, senior citizen property tax deduction and senior citizen property tax circuit breaker credit. It also increases the value of these deductions to $20,000.
  • SB 1 gives counties the option to let homeowners annually defer up to $500 of their property tax bill until their home is sold.


Relief for farmers

  • SB 1 reforms the agricultural land assessment formula to cut property taxes for farmers.

Reforms to the referendum process

  • SB 1 institutes a one-year “cooling off” period for capital project referendums, so taxpayers can see one year of savings on their property tax bills before deciding whether to approve a new referendum.
  • SB 1 requires all referendums to occur during November general elections when turnout is highest.

The measure now moves to the full chamber.