INDIANAPOLIS (WISH) — Indiana counties are working to identify ineligible homestead deductions, Indiana’s I-Team has learned.

A homestead is your family’s home— the primary place you live.

A homestead deduction is a property tax savings that lowers your home’s taxable assessed value.

The Indiana constitution protects your homestead through 1% property tax caps, plus you can get a big break on your property tax bill.

“A homestead deduction can cut your taxes in half on residential property, and it is very, very important,” Drew Carlson said, a deputy auditor at the Marion County Auditor’s Office.

For example, Indiana’s I-Team looked at two properties with nearly identical value. The homestead’s tax bill was $3,300, while the rental property’s tax bill was nearly double that, at $6,600.

“Seems like fraud”: Indiana’s I-Team receives a tip

Indiana’s I-Team received a tip in May about possible homestead fraud involving a property on North Pennsylvania Street.

“This seems like fraud to all of us, who are paying our property taxes per the law,” wrote the viewer. “Meanwhile, the residents of Meridian Kessler are facing skyrocketing property taxes. Please help remedy this wrong!”

Indiana’s I-Team started digging and contacted the Marion County Auditor’s Office about an address on North Pennsylvania Street.

“You were very instrumental in helping us get a good tip on this,” Carlson said to Indiana’s I-Team.

The Marion County Auditor’s Office launched an investigation, and two months later, the office told us they did find a violation—also known as an “ineligible homestead deduction.”

Their investigation found Asher Reed claimed a homestead deduction on a rental property on North Pennsylvania Street for years, even though he does not live there.

“I think there’s a misunderstanding out there that some folks think they can have a homestead on every property that they own if they own multiple properties,” Carlson said. “What you’re doing is you’re increasing the tax rates in your taxing district, and that affects every other taxpayer who’s playing fair.”

Property taxes help fund essential services like schools, police and fire service. In Indiana, rental properties do not qualify for homestead deductions.

When we knocked on the door at the Pennsylvania Street home, the man who answered said he has been renting the property for several years.

Kara Kenney with Indiana’s I-Team rings the doorbell of a rental home located on Pennsylvania Street. (Circle City Broadcasting Photo)

As a result of their investigation, the Marion County Auditor’s Office removed the homestead on the rental property and sent Asher Reed a bill for back taxes dating back to 2023, as well as fines and civil penalties totaling $16,095.

• Indiana’s I-Team: Are most taxpayers doing this intentionally or unintentionally?
• Drew Carlson: We get a mixed bag. There are definitely we’ll sometimes find folks who are we’ll find a second homestead deduction, and then as we begin to look, we find out that they’ve got like seven and eight across the state.

Indiana’s I-Team emailed Asher Reed about the ineligible homestead deduction, and we did not hear back.

So we rang the doorbell at the property where he says he lives, which is also on North Pennsylvania Street. No one answered the door.

In a letter to the Marion County Auditor’s Office, Reed said he was not aware the deduction was still active on his previous address, the rental property.

Reed said in the letter he moved in May 2022 to care for his grandmother, former first lady Judy O’Bannon.

• Indiana’s I-Team: Why wouldn’t the county have caught it until now?
• Drew Carlson: Well, effectively, there was no indicia to us that that the taxpayer didn’t  live there.  I don’t know if they had ever put any what I call roots down at the new address in terms of data that we would have been able to find, like registering to vote at the new address, or changing utilities to a new address

The Marion County Auditor’s Office found the property where Reed lives with his grandmother does have a valid homestead deduction on it. Indiana’s I-Team checked and Reed did pay the $16,095 in back taxes and penalties by the August 23 deadline.

Counties use various tools to find homestead deduction fraud

When someone applies for a new homestead, the county checks to see if the person already has one.

But in Asher Reed’s case, he did not apply for a new homestead deduction, which is one reason why no one caught on until the Marion County Auditor’s Office received a tip.

“I think everything stayed static with the old property, so it is hard,” Carlson said. “We are dependent on the public to let us know when you think something isn’t right. We’ll look into any tip that we get.”

Kara Kenney meeting with Drew Carlson, a deputy auditor at the Marion County Auditor’s Office on September 15, 2026. (Circle City Broadcasting Photo)

Those tips can always be emailed to auditor-deductions@indy.gov or sent in by phone to 317-327-4646. In Hamilton County, you can email ineligiblehomesteadtips@hamiltoncounty.in.gov.

Indiana’s I-Team found last year, Hamilton County sent back tax notices to 165 ineligible homesteads.

Marion County also uses other tools to look for fraud including voter registration records, death records, as well as online searches for rental and real estate websites for vacant properties.

Marion County identified about 40 ineligible homestead deductions in 2025. Hendricks County found 82 cases last year.

Indiana legislature added 10% fine for violators

Peter Francos is a lecturer in accounting at IU Indianapolis at the Kelley School of Business. He points out state lawmakers are making it even more painful for people who commit homestead fraud, even if it’s unintentional.

“They can not only assess fines and penalties on the difference between the amount that should have been paid and the amount that was paid, they can also now assess a 10 percent fine on that total amount,” Francos said.

Peter Francos, a lecturer in accounting at IU Indianapolis at the Kelley School of Business. (Circle City Broadcasting Photo)

He says many married couples do not realize they only get one homestead deduction between them.

“That’s one of the potential opportunities for fraud,” Francos said. “You don’t want to be subject to the to the back taxes and the fines, penalties, and interest that come along with proper or homestead deduction fraud.”

He says having a legitimate homestead deduction is becoming even more valuable.

“There is a new homestead credit that’s been instituted in 2026– $300 or 10% of the property tax that was assessed,” Francos said.

“Let us know”:  Marion County planning sweep

The Marion County Auditor’s Office is planning a homestead sweep this spring.

They are launching new software that will allow them to better identify ineligible homestead deductions.

(Circle City Broadcasting Photo)

“Folks have an opportunity to see if they have duplicate homesteads at this point and let us know,” Carlson said. “It’s really, really critical for folks when they’re changing the use of their of their of their property. If you’re out there with multiple homesteads, ultimately we will catch you.”

You have to apply for your homestead deduction by January 15 of the pay year of the tax cycle.  In Indiana, we pay in arrears, so we’re currently paying our 2025 taxes.

“For example, if somebody were to purchase a house in 2025 and it’s their primary residence, they would need to apply for that homestead deduction, filing a form HC10 by January 15th of 2026 if they want to see that homestead deduction on the 2026 bill that they receive in May of 2026,” Carlson said.

Contact us at tips@indianasiteam.com