Indiana Bill Aims to Ease Property Tax Burden for Farmland Owners

State Rep. Kendell Culp (R-District 16) has introduced House Bill 1192, which aims to reduce the property tax burden on farmland owners in Indiana by changing the method used to assess the value of agricultural land.

The bill is a response to the significant increase in farmland assessments over the past three years, with agricultural land values rising by 63%. Culp’s proposal adjusts the formula for farmland assessments, which currently relies on an interest rate capitalization rate of 8%. Under his bill, the capitalization rate would increase to 10%, which would lower the overall assessed value of farmland.

Additionally, the bill suggests a shift in how historical data is used to determine assessments. Currently, the highest year of the last six years is excluded, and the average of the remaining five years is used.

Culp proposes dropping the two highest years and averaging the four lowest, which he believes would more accurately reflect the current economic conditions of agriculture. This change would result in a more equitable and realistic assessment, he argues.

A fiscal study conducted by the state legislature estimates that the bill would reduce property tax payments by $33.2 million for Indiana farmland owners in 2027.

While critics have raised concerns about potential revenue deficits for local governments and schools, Culp stresses the importance of fairness in tax assessments and asserts that agriculture should not bear an outsized share of the tax burden.

 

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