Indiana’s 2025 legislative session brought significant changes to housing policy across our state. From protecting tenants’ rights to expanding housing infrastructure, lawmakers enacted several measures aimed at improving housing stability and access for Hoosier families. Here’s an overview of some of the major housing initiatives passed this year.
Through the end of the year, we will be discussing Indiana housing policy, what was enacted in 2025, taking a deep dive into these bills, and highlighting the positive impacts that they can have on housing as a whole within our state. Today, we begin this discussion by examining what happened in Indiana in 2025.
Senate Enrolled Act 142: Eviction Sealing Law
What It Does:
This law streamlines the process for removing eviction records. This is achieved through the automatic sealing of eligible eviction cases when they are dismissed, in judgments in favor of the tenant, or when judgments are overturned on appeal. Tenants who have satisfied their financial obligations can petition for the sealing of eviction records.
Positive Housing Impact:
These changes help Hoosiers achieve stable housing by reducing barriers created by eviction records, which we’ve described in previous blog posts as the “scarlet E” that labels a renter as a “bad tenant” and limits rental opportunities. Sealed eviction records are not accessible to landlords during tenant screening processes, providing individuals and families with better opportunities for safe and secure housing.
Andrew Bradley, Senior Director for Policy and Strategy at Prosperity Indiana, noted that “Indiana’s expanded eviction sealing under SEA 142 will help put safe, fair, and affordable housing in reach for thousands of Hoosier households and their communities”. This is significant because Indiana has one of the lowest rates of affordable housing, the highest cost burdens, and the highest rates of eviction filings in the Midwest.
Senate Bill 1 (SEA 1): Property Tax Relief and Reform
What It Does:
This comprehensive tax reform package provides substantial relief to homeowners through multiple mechanisms:
- A 10% property tax credit up to $300 on all homestead property tax bills beginning in 2026
- Additional stackable credits of $150 for fixed-income seniors and up to $400 for disabled veterans
- The homestead supplemental deduction increases to 40% in 2026 and grows to 66.7% by 2031
Positive Housing Impact:
Hoosier homeowners are projected to save $1.3 billion in property taxes over three years, with two-thirds of Hoosier homeowners seeing a lower bill in 2026 than they did in 2025. This significant tax relief helps homeowners maintain housing affordability and reduces the financial burden of property ownership, making homeownership more sustainable for Indiana families. In theory, this can mean an easing of the rental occupancy stock, allowing for more supply in the rental market as some renters transition into homeownership.
The graduated approach to increasing deductions is expected to provide long-term stability and predictability for homeowners as they plan their household budgets. For seniors on fixed incomes and disabled veterans, the additional credits offer critical support to help them age in place and maintain their homes.
House Bill 1005: Expanding Access to Housing Infrastructure
What It Does:
This legislation expands the Residential Housing Infrastructure Assistance Program, a revolving loan fund designed to help local governments pursue infrastructure projects that support housing development. The bill also streamlines the regulatory process to remove timely and costly barriers to housing development.
Communities can apply for loans to help cover the costs of infrastructure projects, such as water distribution and sanitary sewer systems, as well as electric or gas distribution lines that are essential for housing projects. The bill also allows third-party qualified inspectors to perform plan reviews or inspections, streamlining the permitting process.
Positive Housing Impact:
In its first two rounds, $82 million in funding through this program supported Hoosier communities in adding over 3,000 housing units. By expanding this successful program, HB 1005 directly addresses Indiana’s housing shortage by making it financially feasible for communities to build the infrastructure necessary for new housing developments.
The streamlined permitting process reduces development timelines and costs, which can result in more affordable housing units reaching the market more quickly. This is particularly important for rural and smaller communities that may lack the resources to invest in extensive infrastructure on their own.
House Bill 1578: Fair Housing Anti-Discrimination Protections (Proposed)
What It Does:
This bill will expand Indiana’s fair housing statute to prohibit discrimination based on a person’s source of income, military active-duty status, and veteran status.
Positive Housing Impact:
Source of income protection is particularly significant for housing accessibility. This provision prevents landlords from discriminating against renters who use housing vouchers (Section 8), expanding housing options for low-income families who receive rental assistance. Many qualified renters with vouchers face rejection simply because of their payment method, even when they can afford the rent.
For military service members and veterans, this protection ensures that those who serve our country aren’t denied housing opportunities based on their military status. This is especially important for active-duty personnel who may face frequent relocations and need to secure housing quickly.
House Bill 1018: Old Home Repair Tax Credit
What It Does:
This bill allows a credit against a qualified taxpayer’s state tax liability in an amount equal to 20% of qualified expenditures for preservation or rehabilitation of residences at least 85 years old, or 55% for replacement of pre-1940 electrical wiring and fixtures.
Positive Housing Impact:
This tax credit incentivizes the preservation and improvement of Indiana’s historic housing stock, which often falls into disrepair without financial assistance. By providing substantial tax credits, particularly the 55% credit for updating outdated electrical systems, the law makes it more financially feasible for homeowners to maintain and improve their older homes.
This policy serves multiple housing goals: it preserves neighborhood character, prevents deterioration of existing housing stock, improves safety in older homes, and keeps these properties habitable rather than allowing them to become blighted. Historic homes are a vital part of Indiana’s affordable housing stock, and this credit helps ensure they remain safe and habitable.
Conclusion: A Multi-Faceted Approach to Housing
Indiana’s 2025 legislative session demonstrated a comprehensive approach to housing policy, addressing needs across multiple stakeholder groups. From the eviction sealing law to expanded infrastructure funding that has already helped communities add over 3,000 housing units, these reforms represent meaningful steps forward.
While challenges remain, including Indiana’s 137,427 affordable and available homes needed for extremely low-income households, the 2025 legislative package provides new tools and protections to strengthen housing stability across the state. From helping tenants overcome eviction records to supporting homeowners with tax relief and infrastructure investments, these policies work together to address various aspects of Indiana’s housing needs.
As these laws take effect throughout 2025 and beyond, their full impact on Indiana’s housing landscape will continue to unfold, ideally creating more opportunities for all Hoosiers to access safe, stable, and affordable housing.
