Residential Reinvestment Abatement · Working proposal · Page 2 of 8
Build or substantially rebuild a home in a neighborhood where Indianapolis is not getting new homes, and the parcel carries a published ten-year property-tax abatement that follows the house to whoever buys it.
Every design choice on this page follows from one requirement. A buyer pulls up their Marion County parcel and the abatement is itemized there, the same way a homestead deduction is today. Not a check to a builder. A line on the record.
| Land, assessed value | $45,000 |
| Improvement, assessed valueThe new house. This is the value the abatement applies to. | $280,000 |
| Gross assessed value | $325,000 |
| Residential Reinvestment Abatement100 percent of the increase in assessed value from the improvement, year 2 of 10 | −$280,000 |
| Homestead and other deductionsItemized separately, as they are today | … |
| Net assessed value before other deductions | $45,000 |
Illustrative figures. The dollar saving is modeled further down this page against the rules DLGF published for taxes payable in 2027 and Marion County's certified 2026 rates. On this home it comes to about $2,885 a year. That is a model, not a quote, and the assumptions are listed with it.
Hamilton County, Ohio already publishes exactly this for Cincinnati homes. One parcel record there shows $650,000 of abated value against $1,367,810 of improvement value, with the auditor's note reading that a 15-year abatement runs through tax year 2039. Another shows $596,780 of abated value on the public record. (Figures from Hamilton County Auditor parcel pages reviewed in early September 2026. Re-verify before quoting.)
Which makes the benefit advertisable. A builder should be able to list a house this way, and a buyer should be able to check it against the county's own site before signing anything:
$349,900
Indianapolis Reinvestment Zone
Indiana caps a homestead's tax at one percent of gross assessed value, so an abatement is worth less than its face value. This calculator applies DLGF's published deduction schedule for taxes payable 2027 onward and the certified 2026 rates. Change any number.
| Year one | Without abatement | With abatement |
|---|---|---|
| Gross assessed value | ||
| Abatement deduction | $0 | |
| Homestead standard and supplemental deductions | ||
| Net assessed value | ||
| Tax at the district rate | ||
| One percent cap on gross AV | ||
| Bill after cap and $300 supplemental credit |
Year-one saving
Ten-year saving
Rate held constant. Deduction schedule steps each year per DLGF.
Share of face value delivered
What the circuit breaker leaves of the paper benefit.
Assumptions: homestead standard deduction $40,000 for pay-2027, falling $10,000 a year to $0 by pay-2031; supplemental deduction 46 percent for pay-2027 rising to 66.7 percent by pay-2031, capped at 75 percent of gross AV; one percent homestead cap; supplemental homestead credit of the lesser of 10 percent of the bill or $300; abatement deduction applied before homestead deductions; no other local credits. Sources: DLGF memos of June 12, 2025 and May 27, 2026 on SEA 1; DLGF 2026 Marion County budget order. The deduction ordering should be confirmed with the Auditor before any figure is printed for a buyer.
The benefit attaches to new value, not to the purchase. That is the distinction that makes this defensible.
This is not "buy any house in this neighborhood and get an abatement." In a residentially distressed area, Indiana sets the deduction as the increase in assessed value resulting from the rehabilitation or redevelopment, multiplied by a locally set percentage. The land underneath keeps paying. Someone who buys an existing house gets nothing new. Someone who builds one, or substantially rebuilds one, gets the increase sheltered for the term.
Vacant lot to new house
$300,000 abated
Lot assessed at $30,000. New house adds $300,000 of improvement value. At 100 percent, the $300,000 is the abated amount. The $30,000 keeps paying.
Substantial rebuild
$175,000 abated
Old house at $100,000. Reconstruction takes it to $275,000. The abatement applies to the $175,000 increase, not the whole house.
Existing house, no work
Nothing
A buyer of an unchanged existing home in the same zone gets no abatement. There is no new value to shelter.
We are not subsidizing housing because it happens to be new. We are removing the tax penalty for investing where the market is not producing homes.
It came from a phone call with Onyx+East, who are selling new homes under Cincinnati's residential abatement right now. At their Everly development in East Walnut Hills, a roughly $695,000 home carries a 15-year abatement with estimated total savings the listing puts at up to $500,000, and the company's own announcement cites savings as high as $13,500 a year. (Onyx+East listing and project announcement, reviewed September 2026.)
Two Ohio cities give us two different things to borrow. Cincinnati has the geography. Cleveland has the cleaner percentages.
| Cincinnati tier | Market | New construction | Max value abated |
|---|---|---|---|
| Lift | Weakest | 15 years | $300,000 |
| Expand | Middle | 10 years | $300,000 |
| Sustain | Strongest | 5 years | $200,000 |
Cincinnati scores each neighborhood on six indicators: household income relative to the metro, poverty, home values, mortgage origination, change in residential values, and new construction activity. Zero to two indicators met is Lift; five or six is Sustain. Renovations get longer terms than new builds, and there are bonuses for two-to-four unit buildings, transit proximity, energy performance, accessibility and historic rehabilitation. Tiers are supposed to be re-scored every three years.
| Cleveland area | Abatement | Affordability tie |
|---|---|---|
| Market Rate | 85% | Value caps on single-family projects |
| Middle Market | 90% | Value caps on single-family projects |
| Opportunity | up to 100% | 100% when all units meet stated AMI limits |
Cleveland's term is generally 15 years. Columbus runs a third variation, and in 2025 made its multifamily abatement available by right, with a fee in lieu of on-site affordable units and no negotiated agreement. That by-right principle matters more to me than any particular percentage.
Cincinnati's dashboard shows roughly 311 abatements approved under the ordinance adopted in 2023, and an internal audit found only 42 as of October 2024. In the five years before the redesign the city approved 1,889, roughly 378 a year. Annualized, volume fell by about three quarters after the program got six indicators, three tiers, separate renovation schedules and five bonus categories.
I do not yet know whether that is complexity, restriction, marketing or administration. It is worth a call to Cincinnati's development staff, and it is the strongest argument for keeping the Indianapolis schedule simple enough to put on a yard sign.
More than I expected, with one hard ceiling and one open question that decides everything.
New construction
Already covered
IC 6-1.1-12.1 defines redevelopment to include building a new structure on unimproved land, or building new after demolition. DLGF's January 2026 guidance says the same. No state-law change is needed for new homes.
Who designates
The MDC, not the Council
For a county containing a consolidated city, the statute names the Metropolitan Development Commission as the designating body. The program is created by an MDC resolution. The Council's role is to ask for it, appoint four of nine members, and fund the staff.
Distressed areas
1–4 unit housing
Indiana allows Residentially Distressed Areas covering vacant parcels and one-to-four family housing. The deduction is the increase in assessed value times a local percentage. Income relative to the metro is not currently one of the statutory tests.
Transfer
Survives a sale
IC 6-1.1-12.1-5(g) says the amount and period of the deduction are not affected by a change in ownership, so long as the use continues and the new owner files. The clock does not restart at closing.
Local precedent
Monon 21
Onyx+East already holds an Indianapolis residential abatement at 80 percent for each of ten years. The city's own abatement ordinance contemplates owner-occupied single-family projects.
The ceiling
Ten years
Ohio runs 15. Under current Indiana law an ordinary abatement schedule may not exceed ten years. So this is an Indiana version, not a copy.
IC 6-1.1-12.1-3(e) opens its list of normally excluded facilities, residential among them, with an exception for redevelopment or rehabilitation in a county containing a consolidated city. On its face that gives Marion County broader residential authority than the rest of the state. Nobody has validated that reading, and the statute was written around project-by-project statements of benefits, not a published map.
The one question for Corporation Counsel and DMD, in writing: can the MDC pre-designate zones with objective residential schedules and standardized findings, so a qualifying one-to-four unit project receives the prescribed deduction without an individual negotiation for every house? Yes means this moves locally. No means a narrow amendment and a Statehouse partner.
Publish the incentive in advance instead of negotiating it one house at a time. A flat 100 percent for ten years where we are trying to stimulate building beats a phase-down nobody can explain at a closing table.
| Zone | How a tract qualifies | Abatement on the new improvement |
|---|---|---|
| Reinvestment | Weak on most of the five index factors below | 100% × 10 years |
| Growth | Middle of the index | 75% × 10 years |
| Strong Market | Strong on most factors | No automatic abatement |
| Bonus, applies on top of any zone | ||
| Owner-occupied 2–4 units | Buyer lives in one unit of a duplex, triplex or fourplex | 100% × 10 years |
The missing-middle bonus is the part I care most about. A duplex in a Growth zone ordinarily gets 75 percent. If the buyer lives in one side, it goes to 100. That is how you get someone to build a $350,000 to $450,000 duplex on an east-side lot, live in half and rent the other, instead of the city subsidizing a 200-unit building to get the same units. Cincinnati already gives extra abated value to two-to-four unit projects, so the precedent is clean. Other bonuses worth pricing: vacant-lot infill, replacement of a property on the unsafe-building list, a buyer at or below 120 percent of area median income, and proximity to frequent transit.
Not by income alone. A working-class east-side tract at 85 percent of area median income, with vacant lots, no new permits, flat assessed values and thin mortgage activity, should get the strongest incentive even though it misses an 80 percent line. So each Marion County census tract gets scored on five factors, the methodology gets published before the map, and the map gets re-scored every three years.
| Factor | Source | Who controls it |
|---|---|---|
| Household income relative to the metro | Census ACS, tract and metro medians | Federal. In the prototype map now. |
| Vacancy | Census ACS vacant housing units, cross-checked against the Assessor's vacant-lot count and, if the city registers, HUD's postal vacancy data | Federal. In the prototype map now. |
| Mortgage origination | Home Mortgage Disclosure Act data via the CFPB | Federal. In the prototype map now. |
| New construction | Census ACS units built since 2010 now; city permit counts for the last five years when DMD provides them | Federal now, local later |
| Assessed-value growth | Assessor parcel history by tract, requested from the Assessor; financed-purchase values from HMDA stand in until then | Local. The one remaining proxy. |
Every input in the prototype comes from outside the City-County Building. When the scoring is fixed in advance and the inputs are federal, the map is a computation rather than a negotiation. The prototype map runs this exact method on all 253 tracts.
Indiana keeps the abatement alive through a sale but makes the new owner file for it. That is the only friction in the design, and it gets folded into paperwork the buyer is already signing.
If state law will not allow that to be fully automatic, the ask to the General Assembly is narrow: a qualifying residential deduction in a consolidated city runs with the parcel without a subsequent owner re-applying, so long as the qualifying use continues. That single fix would make the Indianapolis version better than Cincinnati's.
Vacant to Vibrant, the city land bank inside DMD, requires its buyers to build new or rehabilitate, to occupy the home as a primary residence for at least two years, and to close through a title company with a project agreement on the deed. That is the abatement's eligibility test and closing mechanism, already administered, on parcels already concentrated in the weakest markets. Attach the abatement to those parcels first. It also makes the lots easier to sell, which is DMD's own stated goal.
Four things, in the order an opponent would find them. One of them now has an answer. Until the first comes back in writing, this stays a proposal and not a resolution.
Whether the consolidated-city language in IC 6-1.1-12.1-3(e) lets the MDC run a standardized, map-based residential program. One written opinion from Corporation Counsel and DMD. Costs nothing but staff time.
Indiana caps a homestead's property tax at one percent of gross assessed value, so I would not quote a saving until I had modeled it. The model is above. On a $325,000 home in Warren Township the abatement's face value is $7,534 a year, the capped bill without it is $2,950, and the modeled saving is $2,885. The cap takes about 60 percent of the paper benefit and leaves a real one. What still needs DLGF or the Auditor: the order in which the abatement and homestead deductions are applied, and whether any local credit changes the result.
Why approvals fell by roughly three quarters after the 2023 redesign. A phone call, not a study.
Whether an abatement on a lot the city already sold at a discount reads as a double subsidy, and whether the land bank's affordability thresholds and the abatement's income bonus stack cleanly. The 2023 launch used 80 percent of area median income; current materials cite a different figure. DMD needs to reconcile that, and I would rather have the answer before someone else asks.
What I am actually asking for right now is the memo in item one and a DLGF check of the model in item two. Neither requires a vote. Both are prerequisites. The objections page takes the rest of the case against this head-on, and the timeline shows what happens in each branch.
What this means for you
Pick who you are in the bar at the top and this section changes.
Run the calculator on the house you would actually build, at your lot cost, in the district you would build it. If the year-one saving does not move a buyer, tell me. If it does, tell me what your buyer's lender will need to see before it counts.
The record card at the top of this page is the listing feature. What would the MLS need to carry it, and how would a buyer's agent verify the remaining term before writing an offer?
The improvement value is what gets abated, so design that puts more of the cost into the structure and less into site work is rewarded. The owner-occupied duplex gets 100 percent in any zone.
The calculator's with-abatement bill is what the escrow would collect. Whether your underwriting counts it toward debt-to-income is the question that decides how many buyers this reaches.
Set the calculator to your typical home and district, then stack the result on your mortgage or ground-lease product. That combined number is the one I want before I claim anything for households under 80 percent of AMI.
Nothing on this page changes the tax on a home that already exists. It changes the tax on a new or substantially rebuilt one, and only on the new value, for ten years.
Two asks: the written opinion on IC 6-1.1-12.1-3(e), and a DLGF check of the calculator's arithmetic. The second matters for the fiscal note too, because the taxing units' cost is the capped saving, not the face value.