Primary Residence Requirement
To qualify for the Indiana homestead exemption, you must be living in the residence for which you wish to claim the exemption. It must be your primary residence, residential and owner-occupied. Vacation homes and rental properties, therefore, are not eligible to claim the homestead tax exemption with regards to property taxes, and neither are businesses or non-residential real estate such as building lots. You must be able to prove that it is your primary residence if you are asked to do so by the tax officials.
In 2003, the Indiana homestead exemption was raised from $6,000 to $35,000 or 50 percent of the value of the home, whichever number is lower being the number that is granted as part of the exemption. This is a sizable deduction and would make the taxable value of a house assessed at $125,000 only $90,000, creating a substantial savings for the homeowner in his property tax liability.
In order to receive these money saving exemptions on your property tax bill, you will have to file a written application with the County Auditor's office in the county in Indiana where your residence is located. Not doing so is a costly mistake, as you will be assessed at the full current assessed value and will be paying taxes on money which you would not have to pay taxes on otherwise.