Property tax abatement in Indiana is authorized under Indiana Code 6-1.1-12.1 in the form
of deductions from assessed valuation. Any
property owner in a locally designated
Economic Revitalization Area (ERA) who
makes improvements to the real property or
installs new manufacturing equipment is eligible
for property tax abatement. Land does not
qualify for abatement. Used manufacturing
equipment can also qualify as long as such
equipment new to the state of Indiana. Equipment
not used in direct production, such as office
equipment, does not qualify for abatement. |
 |
Real-Property Abatement Calculation
Real-Property abatement is a declining percentage
of the increase in assessed value of the improvement. Abatement periods and
percentages are determined by the local governing body.
Examples follow:
| |
Three Year
Abatement |
Six Year
Abatement |
Ten Year
Abatement |
Year One |
100% |
100% |
100% |
Year Two |
66% |
65% |
95% |
Year Three |
33% |
66% |
80% |
Year Four |
|
50% |
65% |
Year Five |
|
34% |
50% |
Year Six |
|
17% |
40% |
Year Seven |
|
|
30% |
Year Eight |
|
|
20% |
Year Nine |
|
|
10% |
Year Ten |
|
|
5% |
Personal-Property Abatement
Calculation
Personal-property abatement is a declining percentage of the assessed value of the newly installed manufacturing equipment, based on one of two time periods and percentages as determined by the local governing body.
| |
Five-Year
Abatement |
Ten Year
Abatement |
Year One |
100% |
100% |
Year Two |
95% |
95% |
Year Three |
80% |
90% |
Year Four |
65% |
85% |
Year Five |
50% |
80% |
Year Six |
|
70% |
Year Seven |
|
55% |
Year Eight |
|
40% |
Year Nine |
|
30% |
Year Ten |
|
25% |
Property owners must apply for designation to the local governing body, usually the town board, city council, county council, or the metropolitan development commission having jurisdiction over the area. Information on the procedure for designation of an Economic Revitalization Area and the responsibilities of the property owner and local governing body is available by calling the Indiana Department of Commerce.
Automatic Investment Deduction
A three year automatic investment deduction is available by application to the pertinent township assessor.
The annual abatement percentages are 75%, 50% and 25% in the first three years after assessment. For more information, contact the Department of Local Government Finance.
An abatement deduction application must be filed in the office of the county auditor in the county in which the property is located. Please see IC 1-6.1-1-12.1 and 50 IAC 4.2-13. Failure to file the required abatement application by the due date will result in loss of the abatement.
The 2% circuit breaker becomes mandatory for all types of property beginning in 2009 and 2010 and applies to gross assessed
evaluation before deduction. Contact your accountant for details of tax abatement impact.
For more information on Tax Abatement contact:
John Regetz
Executive Director
Two Cadence Park Plaza
Michigan City, IN 46360
(219) 873-1211
fax (219) 873-1595
johnr@mc-edc.com
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