Bray, Holdman, Garten: SB 1 saves homeowners $1.3 billion, provides long-term tax reform and transparency

STATEHOUSE (April 15, 2025) – The Indiana Senate today passed Senate Republicans' top priority bill – Senate Bill 1 – to provide $1.3 billion in property tax relief for homeowners over the next three years. The bill's passage will result in two-thirds of Hoosier homeowners seeing lower tax bills in 2026 compared to their 2025 bill.

"Senate Republicans made SB 1 our top priority because we know how important property tax relief is to homeowners," Senate President Pro Tem Rodric Bray (R-Martinville) said. "How many things can we say we are paying less for this year compared to last year? This bill is absolutely a win for homeowners, who are a key demographic in any healthy community."

The bill's author, State Sen. Travis Holdman (R-Markle), said the bill's passage comes after significant collaboration with members of the House of Representatives and Gov. Braun.

"I cannot thank our partners in the House of Representatives and the governor enough for their collaboration and determination as we worked toward a policy that provides a fair balance between the needs of local governments and Hoosier homeowners," Holdman said. "I believe we have landed on a policy that provides immediate relief and long-term reforms that will promote more transparency for our taxpayers."

SB 1 provides significant relief to homeowners, farmers and businesses in the following ways.

Homeowners

• Two-thirds of homeowners are expected to see a 2026 property tax bill that is lower than their 2025 bill, and nearly all homeowners will see relief under the bill compared to current law.
• SB 1 gives every homestead an extra annual property tax credit to reduce their bill by 10% with a maximum of $300.
• The bill ensures seniors, blind and disabled Hoosiers, and veterans eligible for property tax benefits receive a meaningful tax benefit by changing the current deductions into property tax credits. This means their property tax bill will decrease even if their bill is at the property tax cap. SB 1 also removes the assessed value limit to qualify for these credits.

Farmers

SB 1 saves farmers $116 million by adjusting the agricultural land assessment formula for two years, which will reduce the assessed value of farmland and cut property taxes.

Businesses

SB 1 significantly increases the Business Personal Property Tax exemption:

• For 2026 property taxes, any business with less than $1 million in personal property will be exempt from the tax.
• For 2027 and beyond, any business with less than $2 million in personal property will be exempt from the tax.
• Removes the existing 30% depreciation floor for personal property placed in service after Jan. 1, 2025

Senate Majority Floor Leader Chris Garten (R-Charlestown) added that the bill contains important new provisions that will increase transparency for taxpayers and enact better controls for the system moving forward.

SB 1 contains the following provisions to increase transparency for taxpayers.

More transparency

• Requires local referenda to be held during general elections to align with higher voter turnout, and increases transparency of referenda questions to better note the tax impact
• Creates a Property Tax Transparency Portal to allow taxpayers to compare their current tax bill with proposed tax rate changes
• Increases transparency for taxpayers by requiring local officials to annually vote on their tax rates
• Ends automatic property tax levy growth by forcing local governments to have a separate public meeting with a stand-alone vote to increase their levy
• Starting in 2031, requires local governments to annually vote on their local income tax (LIT) rate instead of allowing rates to continue indefinitely until they are changed

Better controls

• Decreases the amount of total LIT that local governments can collect, reducing the cap from 3.75% to 2.9% – a reduction of $1.9 billion in LIT revenue capacity
• Stronger controls in place to rein in the $54.3 billion in local government debt
• o Institutes a "cooling off period" for certain local government debt so taxpayers will see a reduction in their property taxes for at least one year before local officials pursue new debt
• o Prohibits local units with high debt from pursuing any new debt-backed projects unless they go through the controlled project procedures that give local taxpayers a say in the matter
• o Prohibits local units from bonding against more than 25% of their LIT distribution for debt issued after May 10, 2025

“State government receives zero property tax dollars, which is why local units of government should be held responsible and accountable by their taxpayers for those continued increases,” Garten said. “SB 1 not only ensures property tax cuts, but it also ensures that if local units of government choose to raise other taxes, like a local income tax, those units will have to justify to their taxpayers why they need more hard-earned taxpayer money instead of first looking to make their operations more efficient.”

Having passed both chambers of the Indiana General Assembly, SB 1 will now move to the governor's desk for his consideration.

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Contact: Molly Swigart, Communications Director
molly.swigart@iga.in.gov

Senate President Pro Tem Rodric Bray (R-Martinsville) represents Senate District 37, which includes Morgan County and portions of Johnson, Owen and Putnam counties.

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State Sen. Travis Holdman (R-Markle) represents Senate District 19, which includes Adams, Blackford, Jay and Wells counties and a portion of Allen County.

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State Sen. Chris Garten (R-Charlestown) represents Senate District 45, which includes Clark County and portions of Floyd County.

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