If you own commercial or industrial property in Indiana, this year’s assessment notices should get your attention.

According to the latest figures from the Department of Local Government Finance (DLGF), commercial assessments are up 16.07% statewide. Industrial property assessments aren’t far behind, climbing 15.59% from 2024 to 2025.

These increases reflect results from the annual ratio studies conducted by county assessors across all 92 Indiana counties. While not every uptick in assessed value translates directly into a tax hike, this is a clear indicator of where things are headed: many business owners should expect higher property tax bills in 2026.

The Bigger Picture: A Shift in Tax Burden

At the same time commercial and industrial values are rising, residential and agricultural properties are getting relief.

Earlier this year, Indiana lawmakers approved a $1.2 billion tax cut for homeowners over three years. The centerpiece is a 10% credit on homestead tax bills, capped at $300 per household. Agricultural landowners are also seeing lower valuations, thanks to changes in how capitalization rates are applied to farmland.

What does that mean for business owners? A larger share of the property tax base is shifting onto commercial and industrial classes, especially in counties with aggressive reassessment practices or rapid development. Simply put, your property may now be carrying more of the local tax load.

Indiana’s Approach to Valuation: The Statutory Safeguard

One key feature of Indiana’s property tax system is how values are determined. Under state law, assessors must calculate property value using all three standard approaches:

  • Cost Approach: What it would cost to replace the property, minus depreciation.
  • Income Approach: The net operating income the property generates, capitalized into value.
  • Sales Comparison (Market) Approach: What comparable properties are selling for.

Here’s the important part: assessors are required to select the lowest of the three valuation results.

That statutory guardrail can help buffer against runaway assessments—particularly in cases where cost and market values are inflated but income hasn’t kept pace. But it only works if the data is accurate and the methods are applied correctly. And that’s not always guaranteed.

Local Context Matters

Despite the strong statewide averages, the actual tax impact will vary by jurisdiction. Local market conditions, vacancy rates, and assessment practices can all influence the final value placed on a property.

For industrial owners, the effects may be especially pronounced. Properties with specialized improvements, high utility infrastructure, or large footprints are often more susceptible to sharp valuation increases—especially when local comparables are limited or outliers drive the analysis.

What to Watch Going Forward

Rising assessed values don’t always translate one-for-one into higher tax bills. Rate caps, local credits, and exemptions still apply. But with double-digit increases in valuation, many owners are facing a different landscape going into 2026.

Here are three practical takeaways:

  1. Review your 2025 assessment now. Understanding how your local assessor approached the valuation, and whether all three methods were properly considered, can be the difference between catching an error and absorbing it in your tax bill.
  2. Compare properties in your area. If similar assets are assessed differently, that may be a red flag worth exploring further.
  3. Don’t wait. The earlier you evaluate your notice, the more options are on the table. Waiting until tax bills arrive limits your ability to respond.