That lets an investor work out the tax ceiling before buying. Combined with some of the lowest entry prices of any big Midwestern metro, that makes the arithmetic here unusually predictable, provided you know where the traps are.
Indiana caps the tax on a rental. Know the ceiling before you buy
Since 2010 the Indiana Constitution has capped property taxes as a share of a property's gross assessed value: 1 percent for a homestead the owner lives in, 2 percent for other residential property, including rentals, and 3 percent for commercial property. When the tax rates in a district would produce a bigger bill, the excess is wiped off as a circuit breaker credit.
For an investor, that means a hard upper limit. A rental assessed at $200,000 cannot be billed more than about $4,000 a year in ordinary property tax, whatever the local rates do. The one exception to know about: taxes that voters approve in a referendum, usually for schools, are added on top of the cap.
Two things are changing the picture. First, the 2025 property tax reform law, Senate Enrolled Act 1, created a new deduction for properties in the 2 percent category that phases in over several years, which lowers the taxable value of rentals over time. Second, the same law changes how local governments raise revenue, and analysts expect average local tax rates to rise as the deductions take effect.
Put together, more rentals, especially in high-rate areas like Marion County, will sit right at the cap. That is good news for underwriting: in those places the cap is effectively the bill, and you can budget for it with confidence. Check the property's class code on the county assessment notice to confirm it is taxed as residential rather than commercial, and never rely on the seller's bill. A homeowner's bill reflects the 1 percent cap and homestead deductions a rental does not get.
Indianapolis and the suburbs: the widest spread in the Midwest
The city of Indianapolis is where most Indiana investor activity happens, and the entry prices are the reason: the city's median sale price sits well below the national median and below most big Midwestern metros.
That median hides a huge range. Downtown and the near-north neighborhoods sell at prices more than double those on parts of the west and southeast sides. Those are different markets that happen to share a city limit, and an after-repair value built on the citywide number is wrong almost everywhere.
The suburbs are the other end of the scale. Hamilton County, Carmel, Fishers, Noblesville and Westfield, carries the region's highest prices, and inventory across central Indiana has been rising, which means slower sales than the boom years.
The practical split: inside the city, the question is whether the numbers survive the neighborhood you are actually in. In the northern suburbs, the question is whether your renovation budget and resale price leave enough margin at those higher prices.
Transfer costs, foreclosure and landlord rules
No transfer tax. Indiana does not charge a real estate transfer tax. A sales disclosure form is filed with the county, usually with a small filing fee, so a flip keeps more of its margin than in neighboring Illinois.
Foreclosure. Indiana forecloses through the courts, ending in a sheriff's sale, and for most residential mortgages the sale cannot happen until a waiting period after the case is filed. Indiana does not give the owner a right to redeem after the sheriff's sale, so a sheriff's sale purchase can reach insurable title once the sale is complete. Confirm it with a title company before you bid.
Landlord rules. Indiana is landlord-friendly. For nonpayment, a landlord gives a written ten-day notice to pay or leave before filing an eviction. There is no statewide cap on security deposits, and the deposit must be returned with an itemized list of damages within 45 days after the tenant leaves. State law also limits local governments' power to regulate landlords, though Indianapolis requires rental property registration.
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How the loan gets sized in Indiana, and where it stops
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. For fix-and-flip, rehab and bridge loans, standard pricing starts at 12.99 percent plus 2.99 points. Borrowers who have paid off two loans with the lending partner in good standing can qualify for loyalty pricing of 10.99 percent plus 1.99 points.
The programs lend up to 70 percent of the after-repair value and up to 100 percent of cost, whichever limit is reached first, with a minimum loan of $50,000 and a minimum credit score of 600. Leverage depends on the projects you can document over the past three years. The property must be non-owner-occupied and held in an LLC or corporation.
The loan minimum matters more in Indiana than almost anywhere, because so much inventory is cheap. At 70 percent of value, a house worth $70,000 after renovation supports a loan of about $49,000: under the minimum. So the lowest-priced houses in the state are often outside what a hard money loan can finance at all. Confirm with the lender early whether a low-value house fits the program.
Above that line, the Indiana numbers are straightforward. Take a west-side Indianapolis house worth $150,000 after renovation. Seventy percent is $105,000. If purchase and renovation together cost $120,000, the investor brings the difference plus closing costs and cash to carry the loan, and the property tax on it, once it is a rental, is capped at about $3,000 a year before any referendum taxes.
Your Indiana pre-offer list
1. Work out the tax ceiling. Two percent of gross assessed value, plus any referendum taxes in that district. Ignore the seller's bill.
2. Check the after-repair value supports a loan above the $50,000 minimum. Below that, a hard money loan may not be available at all.
3. Price it by neighborhood, not by city. Use renovated, comparable sales close by.
4. Pull the flood map for the exact address. Properties near the White River and Fall Creek can carry flood insurance and disclosure costs that belong in the budget.
5. Get written contractor bids, then add a cushion of ten percent or more; older Indianapolis houses hide wiring and plumbing surprises behind plaster.
6. Budget several months of holding costs, not a best-case sale. Inventory is rising across the region.
7. Decide your exit before you buy. If you may keep it as a rental, check that the rent covers a DSCR loan payment including the capped tax and real insurance.
What gets an Indiana deal declined
A loan below the minimum. The cheapest houses often cannot support a $50,000 loan at 70 percent of value.
An after-repair value from a citywide median. Indianapolis neighborhoods differ too much for it to mean anything.
A tax figure copied from a homeowner's bill. The rental cap is double the homestead cap, and the homestead deductions disappear.
No cash to carry the loan. The lender needs to see you can cover payments if the sale runs long.
A house you, or someone in your family, will live in. A property you or a close family member such as a parent, child or sibling will live in is owner-occupied, and our lending partners finance non-owner-occupied investment property only.
City guide: hard money in Indianapolis.
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Questions investors ask
What do hard money lenders charge in Indiana?
Our lending partners' fix-and-flip pricing starts at 12.99 percent plus 2.99 points. Loyalty pricing of 10.99 percent plus 1.99 points can apply after two loans are paid off in good standing. Appraisal, title and closing costs come on top, and the lender sets the final terms.
Can I get a hard money loan in Indianapolis and the suburbs?
Yes. Investors send deals from Marion County and the surrounding counties, including Carmel, Fishers, Noblesville and Westfield in Hamilton County. Each deal is underwritten on its own neighborhood's sales, not the metro average.
What is the cheapest house I can finance with a flip loan in Indiana?
The minimum loan is $50,000, and the loan is capped at 70 percent of the after-repair value, so a house needs to be worth well above about $71,000 after renovation before a loan is even possible. Confirm low-value deals with the lender early.
How much property tax will I pay on an Indiana rental?
The constitution caps it at 2 percent of gross assessed value for residential rentals, compared with 1 percent for a homestead. Taxes voters approve by referendum are added on top. A rental assessed at $200,000 is capped at about $4,000 before referendum taxes.
Does Indiana have a transfer tax when I sell a flip?
No. Indiana has no real estate transfer tax. You file a sales disclosure form with the county, usually with a small fee.
Do hard money loans in Indiana require a down payment?
In practice, yes. The loan is capped at a share of the after-repair value and of cost, so most deals need the investor to bring cash for part of the purchase and closing costs, plus cash to carry the loan.
Sources
- Indiana Department of Local Government Finance, the 1, 2 and 3 percent property tax caps and the 2025 SEA 1 deductions
- Indiana General Assembly, Senate Enrolled Act 1 (2025), property tax reform and the new deduction for 2 percent properties
- Indiana Code 32-29-7, judicial foreclosure and sheriff's sale, via Justia
- Indiana Code 32-31-3, security deposit return within 45 days, via Justia
- Indiana DLGF, sales disclosure form, no state real estate transfer tax
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.