Indiana law enables tax deductions for new owners of geothermal-equipped properties

On April 15, 2025, Indiana lawmakers introduced Senate Bill 1, a legislative proposal aimed at streamlining property tax deductions for homeowners utilizing geothermal energy systems. The bill seeks to simplify the process for new owners of properties equipped with geothermal heating or cooling devices, allowing them to inherit existing tax deductions without the need for additional qualifications or filings.

Key provisions of Senate Bill 1 include the automatic eligibility for property tax deductions for new owners of geothermal-equipped homes, provided the previous owner had received such deductions prior to the change in ownership. This provision is designed to encourage the adoption of renewable energy technologies by reducing the administrative burden on homeowners. The bill specifies that these changes apply only to property taxes assessed before January 1, 2025, and will expire on January 1, 2027.

Debate surrounding the bill has highlighted concerns about the potential loss of tax revenue for local governments, as well as the implications for homeowners who may not be aware of the geothermal systems' benefits. Supporters argue that the bill promotes sustainable energy practices and could lead to increased property values, while opponents caution that it may disproportionately benefit wealthier homeowners who can afford such systems.

The economic implications of Senate Bill 1 could be significant, as it aims to incentivize the installation of geothermal systems, potentially leading to job creation in the renewable energy sector. Additionally, the bill reflects a growing trend among states to promote green energy initiatives amid rising concerns about climate change.

As the legislative process continues, experts suggest that the bill's success will depend on balancing the interests of homeowners, local governments, and environmental advocates. If passed, Senate Bill 1 could pave the way for more comprehensive renewable energy policies in Indiana, setting a precedent for future legislation aimed at promoting sustainable practices.