Cost of Living in Indiana
Things cost about ▼ 7% less in Indiana than the national average.
What Things Cost in Indiana
Compared to the US national average
See raw index numbers
US national average = 100. Source: BEA Regional Price Parities 2023.
Indiana is one of the most consistently affordable states in the Midwest, with a cost of living about 10% below the national average and housing costs roughly 23% below. Indianapolis offers genuine big-city amenities (professional sports, a growing food scene, major employers like Eli Lilly and Salesforce) at prices that would be unthinkable on either coast. The state's flat 3.05% income tax is one of the lowest flat rates in the country, and county-level local income taxes add only a modest amount. For families and young professionals priced out of coastal markets, Indianapolis and its suburbs (Carmel, Fishers, Zionsville) offer an unusually strong value proposition.
Indiana at a Glance
Taxes in Indiana
Indiana's state income tax tops out at 3% flat. The combined sales tax averages 7%. Property taxes run about 0.79% of home value, which on a $205,800 median home means roughly $1,626/year.
Cities in Indiana
Ranked from least to most expensive. Index 100 = national average.
Explore Indiana
FAQ About Indiana
Very. Indianapolis has a cost of living roughly 10-12% below the national average. The median home price in the metro is about $205,800, and you can find quality homes in desirable suburbs like Carmel and Fishers for $350,000 to $450,000. Comparable homes in peer cities like Denver, Nashville, or Austin would cost 30-50% more. The low flat income tax adds to the value.
Indiana has a flat state income tax of 3.05%, among the lowest flat rates nationally. Counties add their own local income tax, typically ranging from 1% to 2.5%. In Indianapolis (Marion County), the combined rate is about 5.07%. In suburban Hamilton County (Carmel, Fishers), it is about 4.05%. The flat structure means no surprises as your income grows.
Indiana offers some retirement-friendly tax features: Social Security is not taxed, and there is a modest deduction for other retirement income. The property tax cap at 1% provides predictability for homeowners. Healthcare costs are below the national average. The low overall cost of living means retirement savings stretch further than in most states. The main drawback for retirees is the winter weather.