Indiana Gov. Mike Braun pitched a plan on Wednesday to abolish property taxes for those 65 years and older that he wants the Indiana General Assembly to consider next year, but economists warn it could have a negative impact on funding to local governments and shift the tax burden onto younger homeowners.
Braun announced his plan during a ceremonial signing of House Enrolled Act 121, which offers property tax relief to certain groups of veterans. It increases the property tax deduction for totally disabled veterans from $14,000 to 100% of assessed value and removes a $240,000 assessed value cap.
“Once you get to 65, maybe you ought to have some relief from your own government to not have property taxes after that,” he told reporters at a Wednesday news conference. “So I’ll be looking for enterprising legislators to see if they’re hearing that, too.”
Braun said he’s also heard from older homeowners that once a mortgage is paid off then “why should you then have a fixed cost?” The Republican governor said he doesn’t want to “ever starve” local units of government, but government expenses shouldn’t be more than what taxpayers can afford.
Under Senate Enrolled Act 1, signed into law in 2025, two-thirds of taxpayers saved up to $300 on their 2026 property tax bill while local governments, school districts, libraries and other units will lose $1.4 billion through 2028. If the legislature passed a law to eliminate property taxes for property owners 65 years and older, that would further limit the amount of money those entities receive, experts said.
Currently, Indiana property owners over 65 are eligible for a $150 credit toward their bill if they meet certain income guidelines.
Indiana’s property taxes are based on the market value of the home, which has been increasing steadily over the last few years, said Anthony Sindone, director of the Center for Economic Education and Research at Indiana University Northwest and visiting faculty of the School of Business and Economics.
That means that property tax bills for all homeowners have increased since buying their home because the home’s value has been increasing, Sindone said. Property tax dollars are what fund local governments, he said.
In Indiana, 24% of the population is 60 years and older and 26% of the population in Lake, Porter and Jasper counties is 60 years and older, according to data from the Indiana Business Research Center through the IU Kelley School of Business and Census Bureau ACS estimates for 2024.
The median home value for someone 60 years and older statewide is $227,800, and the median home value for someone 60 years and older in Lake, Porter and Jasper counties is $253,200, according to the data.
Of those 60 years and older, 70.1% of the population statewide isn’t in the workforce, while 71.9% of the population in Lake, Porter and Jasper counties isn’t in the workforce, according to the data.
The mean Social Security income is $26,585 statewide for those 60 years and older and $27,477 in Lake, Porter and Jasper counties, according to the data, while 81.6% of those 60 years and older statewide own their homes and 85.3% of those 60 years and older in Lake, Porter and Jasper counties own their homes.
Carol Rogers, the director of the Indiana Business Research Center, said there would be a “significant hit to taxes on a local basis” if older homeowners didn’t have to pay property taxes because those dollars fund services like garbage pick up, park maintenance, police, fire, public works and more. School funding for transportation, utilities, repairs and maintenance also would be negatively impacted by the elimination of a large number of taxpayers.
If the property tax was eliminated, Rogers said the benefit to those 60 years and older would be that they would have more money to spend in the community.
The challenge older homeowners face is that they have a fixed income, Rogers said.
“There’s a balance to be met with this,” Rogers said.
Depending on how the legislation is written, Rogers said local governments would be able to make up some of the lost revenue by increasing property taxes for the other homeowners. But, she said that would likely not make up the difference in property tax losses because Indiana has property tax caps.
Matt Greller, CEO of Accelerate Indiana Municipalities, said he would like to see the legislature approach property tax relief “that takes a broader picture rather than targeting just specific groups.”
“Our number one interest is making sure that our members, cities and towns in Indiana, have the funding they need to provide the services that their constituents expect,” Greller said.
As local governments are adjusting to the property tax reductions from Senate Enrolled Act 1 that was passed in 2025, Greller said an elimination of property taxes for a group of homeowners “would have a tremendous impact.”
“We still have another three to four years of phased in property tax reductions that are coming down the pike here and those are going to have significant implications for local governments,” Greller said. “We don’t even know what the full impact of those are going to be yet, and now we’re already starting to talk about additional modifications to the property tax system.”
Unless options are presented in potential legislation, Greller said local governments would be limited in their ability to try to make up funds from a potential cut in property taxes. While some of the property tax loss could be shifted to the other property tax payers, the property tax caps would limit the amount a local government could make up, he said.
More than likely, local government leaders will be left “little to no choice” but to cut community services, Greller said.
“You’re looking at significant cuts to services,” Greller said. “It’s a big policy discussion and it goes much deeper than just providing lower property tax bills to homeowners.”
Sindone said his initial reaction to Braun’s plan was excitement because he’s over 65. But, as an economist, Sindone said eliminating property taxes for a group of homeowners means the money will have to be made up somewhere else, like local income taxes.
“If we’re going to eliminate property taxes, and keeping in mind that property taxes fund local governments … that money has to come from some place in order to provide the services that local people are going to demand,” Sindone said.
If the legislature would like to offer relief to older homeowners, Rogers said another option could be to consider income-based relief.
“Allowing people the opportunity to continue to invest in their community might have some value to consider,” Rogers said.
