Indiana residents face uncertainty as top state lawmakers have remained silent on how they plan to eliminate homeowner property taxes, a move that would impact billions in local government and public school revenue. Republican Senate Appropriations Committee Chair Ryan Mishler, Rep. Craig Snow, R-Warsaw, and Sen. Chris Garten, poised to become the state Senate’s new Republican leader, first touted the plan “to end property taxes on the home you live in” in an Aug. 20 post on Mishler’s campaign Facebook page. The post also promotes a “Property Tax Freedom” town hall and rally scheduled for Sept. 29 in Warsaw.
Despite the high-profile nature of the proposal, no details have been released on how the state would eliminate the tax stream, which provides much of the revenue for city and county governments and public school districts. This silence has left key Statehouse interest groups, who closely monitor property tax issues, anxiously awaiting information. Property taxes on owner-occupied homes accounted for nearly $4.1 billion, or 38%, of the $10.6 billion in statewide property taxes billed during 2025, according to a Legislative Services Agency report.
Even potential allies, such as the Indiana Association of Realtors, have not been informed of the plan's specifics. Chris Watts, a vice president at the Indiana Association of Realtors, told the Capital Chronicle that no information had reached them at the state level, noting the group was “on pins and needles.”
Neither Mishler nor Snow, who serves as vice chair of the tax code-writing House Ways and Means Committee, responded to multiple interview requests from the Capital Chronicle. Garten, R-Charlestown, also declined an interview, with his office indicating he “is going to defer to Sen. Mishler.”
Questions regarding how such an elimination would work and how local governments and schools would replace such a large revenue source are widespread. David Bottorff, executive director of the Association of Indiana Counties, expressed “huge concern” for local governments about how funds would be replaced. He highlighted the importance of details on whether it's a goal or objective, or a phased-in approach, stating, “all those details matter on what that transition would look like.”
Matt Greller, CEO of Accelerate Indiana Municipalities, confirmed discussions with Mishler this summer about homeowner property tax elimination, noting Mishler was “very clear that the revenue would have to be replaced.” A major worry for local governments is the potential for higher interest rates on borrowed money for projects, as bond payments have historically been secured by stable property tax revenue. Greller questioned the impact on the “bonding market” if income tax replaced property tax, wondering about increased interest costs.
The concept of abolishing property taxes has been explored before. Legislators studied the idea in 2007 but stepped back when calculations showed a doubling or more of the state's sales tax or income tax would be necessary to replace the revenue. Larry DeBoer, a Purdue University economist who has studied Indiana tax policy for decades, stated that these options of large hikes in other taxes, such as the state income tax, or squeezing local budgets have not changed. DeBoer commented, “An income tax rate of 6 or 7 (percent) would probably do it.”
Mishler has previously put forth ideas for significant homestead property tax cuts. One 2024 bill he filed proposed a potentially $1 billion fund from money the state annually directs to a pre-1996 teacher pension fund. However, this amount would still fall short of homeowner property tax collections and might not be available for several more years. Other property tax reduction concepts are also under discussion, including Governor Mike Braun’s suggestion of ending home taxes for homeowners older than 65 who have paid off their mortgages. Another proposal from a Republican legislator suggests eliminating all property taxes and replacing the revenue by extending the state’s 7% sales tax to include currently untaxed services, such as haircuts, construction labor costs, and lawyer fees.
Terry Spradlin, Executive Director of the Indiana School Boards Association, articulated having “more questions, certainly, than answers” regarding the homestead tax abolishment suggested by Mishler, Snow, and Garten. Spradlin described the concept as “very vague,” adding, “So we’re all anxious to get more detail.” Such a major property tax proposal, if it advances, is expected to become a leading topic of debate during the 2027 legislative session, which begins in January. Spradlin emphasized the significance of the proposal, given that the lawmakers are “high-profile leaders” of their caucuses, meaning it warranted attention.
