Cost of Living in Indiana — Housing, Taxes & Everyday Expenses
Very low flat tax, affordable housing, Midwest stability
Data: 2026-Q2 · BLS · HUD · KFFOverview
Indiana combines a very low flat income tax with affordable housing and a stable manufacturing and healthcare economy. Indianapolis has grown significantly as a medical device and logistics hub.
Housing costs
Median 1BR rent in Indianapolis is approximately $1,100. Outside Indianapolis, rents drop to $700-$900 in cities like Fort Wayne, Evansville, and South Bend.
1BR FMR across major Indiana cities: $1,267 – $1,267/mo (HUD FY2026)
Tax reality
3.0% flat rate effective 2025 (HB1001; reduced to 2.95% in 2026)
Everyday expenses
At a cost of living index of 88, Indiana is about 12% cheaper than the national average of 100. Indiana's 3% flat tax and low housing costs make it one of the highest purchasing-power states for middle-income earners.
City comparison
Salary reality in Indiana
Cost of Living in Indiana — FAQ
What is Indiana's income tax rate?
Indiana has a flat income tax rate of 3.0%, one of the lowest in the nation. This is a significant advantage for middle and high earners.
Is Indiana affordable?
Yes. Indiana has a cost of living index of 88, about 12% below the national average. Housing is especially affordable.