SB 367 changes Indiana’s property tax assessment adjustment rules for real property, with a specific focus on owner-occupied homes. The bill amends IC 6-1.1-4-4.5 to provide that residential real property used and occupied by the owner as a primary residence may not have its assessed value adjusted based on investment residential real property. In practical terms, the annual adjustment process for homesteads would be insulated from value changes tied to non-owner-occupied residential properties.
The bill also revises the Department of Local Government Finance’s methodology for setting the annual base rate used in assessment adjustments. It would replace the current four-year rolling average with a six-year rolling average, require elimination of the highest agricultural land market value year from that calculation, and direct the department to use different capitalization rates depending on how much the preliminary base rate changes from the prior year. These changes are intended to smooth annual fluctuations in assessed values and make the adjustment formula more stable.
SB 367 would affect state tax administration and local property tax assessments beginning January 1, 2026. It would alter the rules the Department of Local Government Finance must follow when certifying annual adjustments, and it would specifically limit how residential homesteads are influenced by investment residential property in the annual assessment process. The bill also leaves in place existing special treatment for agricultural improvements and mixed-use agricultural parcels, while refining the valuation methodology used statewide.
Because no committee transcript or vote record is provided, the overall sentiment cannot be measured from debate or roll calls. Based on the bill’s structure, it appears aimed at providing relief and predictability for owner-occupants, while also preserving a more standardized statewide assessment system. The measure is likely to appeal to homeowners concerned about rising assessments, but it may raise questions among assessors, tax administrators, and stakeholders focused on valuation uniformity.
The main point of contention suggested by the text is the bill’s separation of owner-occupied residential property from investment residential property in the annual adjustment formula. Supporters would likely view this as protecting homesteads from market pressures driven by rental or investor-owned housing, while opponents may argue it complicates assessment uniformity or shifts tax burdens among property classes. Another possible area of debate is the change from a four-year to a six-year rolling average and the use of variable capitalization rates, which could affect how quickly assessed values respond to market conditions.
Impact
The bill would amend Indiana Code 6-1.1-4-4.5 governing annual property assessment adjustments. It would require the Department of Local Government Finance to use a revised methodology for determining annual base rates, including a six-year rolling average and specified capitalization-rate adjustments, and it would prohibit owner-occupied primary residences from being adjusted based on investment residential real property. These changes would affect property tax assessments statewide, especially for homestead properties and the officials who administer annual adjustments.
Sentiment
No committee discussion or vote history is available, so there is no direct record of support or opposition. The bill’s text suggests a generally homeowner-friendly policy direction, with an emphasis on shielding primary residences from investor-driven valuation effects and smoothing assessment changes over time. At the same time, the technical changes to the assessment formula indicate a policy interest in maintaining administrative consistency and predictability.
Contention
The most notable contention is likely whether owner-occupied homes should be insulated from valuation effects tied to investment residential property. Supporters may argue this protects homesteads and limits tax increases driven by investor activity, while critics may worry it undermines uniform assessment practices. A second likely point of debate is the revised base-rate methodology, including the longer rolling average and variable capitalization rates, which could be viewed as either stabilizing assessments or distorting them depending on the stakeholder.