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The fact is that without changes in the system, the tax rate may keep rising until 2029.

Tom J. Bechman, Editor, Indiana Prairie Farmer

March 4, 2024

3 Min Read
A wide landscape photo of a soybean field and surrounding rural area
HIGHER TAXES? It appears that the base rate for assessment for property tax purposes will continue rising until at least 2029. Tom J. Bechman

Have you paid your spring installment of property taxes? Likely you paid more than you did one year ago. It’s a trend you may need to accept, at least in the short run. Without changes in the system, experts say property taxes on farmland in Indiana will likely continue climbing until 2029, when the base rate could top out above $3,000 per acre.

The last time rising property taxes on farmland caught people’s attention was a decade ago. Indiana Farm Bureau helped usher in changes to how the base rate for farmland is calculated in the state by the Indiana Department of Local Government Finance, or DLGF. Landowners felt real property tax relief.

“We’re hearing from members again concerned about how much property taxes on farmland are going up,” says Randy Kron, Evansville, Ind., a farmer and president of INFB. “We’ve established a task force within INFB to study the issue and suggest possible solutions.”

Why a task force? Because based on recent commodity prices and the way the farmland base formula works, it could be five years before the base rate stops rising.

Why farmland tax rates rise

The return to sharply rising taxes would have been hard to predict a decade ago. Tax rates are heavily based upon commodity prices, and there was no way to see big jumps in grain prices coming in advance.

Higher grain prices — too much of a good thing? Those on the other side call it “time to pay the piper” instead. Either way, taxes aren’t rising because lawmakers under the cover of darkness snuck in extra tax. It’s simply because the farmland formula is working as set up. When commodity prices are higher, farmland property tax rates go up.

The catch-22 is that when commodity prices go down, it takes much longer for that to work its way through the formula and result in a lower property tax rate for farmland values.

Larry DeBoer, a Purdue Extension ag economist who specializes in taxes, indicates it may be 2029 before high commodity prices cycle through and the base rate levels off. In 2022, the base rate was $1,290 per acre. It increased 16% to $1,500 in 2023, and 27% to $1,900 for 2024. For 2025, DLGF recently announced a 20% increase to $2,280.

Each year, the formula includes corn and soybean prices from the previous seven years, with the oldest year dropped each time. For 2026, prices from 2018 will be dropped, when corn was about $3.60 per bushel. If corn is above $3.60 per bushel in 2026, the newest year added, the base rate will creep up again.

What’s the answer? There is no easy button. Property tax calculations are far too complicated. Plus, one change in the tax system affects other parts of the system. For example, if legislators cut property taxes for homeowners in 2025 but don’t change the formula for farmers, property taxes for farmers could rise even more.

In the meantime, let your legislators know your tax bill is rising, and you are watching what they do. And if you have ideas for solutions, let Randy Kron know. The INFB property tax task force would like to hear from you.

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TaxesLand Management

About the Author(s)

Tom J. Bechman

Editor, Indiana Prairie Farmer, Farm Progress

Tom J. Bechman is editor of Indiana Prairie Farmer. He joined Farm Progress in 1981 as a field editor, first writing stories to help farmers adjust to a difficult harvest after a tough weather year. His goal today is the same — writing stories that help farmers adjust to a changing environment in a profitable manner.

Bechman knows about Indiana agriculture because he grew up on a small dairy farm and worked with young farmers as a vocational agriculture teacher and FFA advisor before joining Farm Progress. He works closely with Purdue University specialists, Indiana Farm Bureau and commodity groups to cover cutting-edge issues affecting farmers. He specializes in writing crop stories with a focus on obtaining the highest and most economical yields possible.

Tom and his wife, Carla, have four children: Allison, Ashley, Daniel and Kayla, plus eight grandchildren. They raise produce for the food pantry and house 4-H animals for the grandkids on their small acreage near Franklin, Ind.

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