Twelve Days of Property Tax Protections for Indiana Taxpayers – Day 4: Assessments Not Required by Law to Win a Case | Faegre Drinker Biddle & Reath LLP

Assessments can be expensive to prepare, in terms of money spent and time invested. Taxpayers would be at a disadvantage if they were forced to pay assessments in all cases to substantiate claims of over-assessments. While appraisals are often the best proof of value, they are not the only convincing proof. The Indiana General Assembly has said assessments may not be necessary to initiate or continue taxpayer assessment appeals. Two laws clearly specify this point. Indiana Code § 6-1.1-15-1.2 (h) provides, “[T]The taxpayer is not required to have an appraisal of the property in order to initiate the [assessment] appeal or continue the call. Indiana Code § 6-1.1-15-3 (f) confirms that assessments are not necessary in appeals beyond county council to the Indiana Board of Tax Review (IBTR), stating “[T]The taxpayer is not required to have an appraisal of the property “to initiate and continue an appeal”.

The 2021 Real Estate Valuation Handbook, on page 3, emphasizes that valuations, while potentially relevant and compelling, are not necessary:

Any evidence relevant to the true tax value of the property on the valuation date can be presented to rebut the presumption of accuracy of the valuation. This evidence may include an appraisal prepared in accordance with generally accepted appraisal standards. However, an appraisal does not need to be presented to support or refute an appraisal. Instead, the validity of the assessment should be assessed on the basis of all relevant evidence presented. The accuracy of an appraisal should be determined on the basis of whether, in light of the relevant evidence, it reflects the true tax value of the property as defined in this manual.

Appraisals are often considered the ‘best proof’ of value. The Indiana Tax Court has expressed a preference for valuations. In Kooshtard Property VI, LLC v. White River Tp. Assessor (2005) he observed: “The Court has held (and has for some time) held that the most effective method of rebutting the presumption that a valuation is correct is to present an appraisal of market value in utility , completed in accordance with the Uniform Standards of Professional Assessment Practice (USPAP).

But evaluations don’t always “win the day.” In Wigwam Holdings LLC vs. Madison County Assessor (2019), the Tax Court of Canada explained that its previous decisions “do not indicate that there is a in itself rule that the mere submission of a USPAP compliant assessment establishes a At first glance case for a reduction of evaluation. Instead, “it is well established that in order to rebut the presumption that an assessment is correct, a taxpayer must make a At first glance case by presenting convincing evidence to the IBTR. The parties in Wigwam Holdings agreed that the property in question was a special purpose property; therefore, the assessment of the taxpayer “who estimated the market value of the Wigwam, without something more, is simply not conclusive evidence of the use market value of the property”. The appraisal did not address the central question of the case, which was the market value in use of the property on the appraisal date, and therefore did not support a reduction in the value of the property. Evaluation.

A recent IBTR ruling illustrates how a taxpayer can win without valuation. In Matkovic v. Boone County Assessor (August 18, 2021), the taxpayers argued that the October 31, 2019 sale price of their condominium (which was lower than the 2020 assessed value) warranted a valuation reduction from the January 1 valuation date. 2020. The IBTR observed that “a timely and arm’s length sale of a property after it has been exposed to the market is still powerful evidence of the market value of using the property, even if it does. is not unassailable ”. Further, the IBTR noted: “A party may also offer information on the actual construction costs, sale or valuation of the property being called or comparable properties, as well as any other information compiled in accordance with generally accepted valuation principles. ” (citing Eckerling v. Wayne Twp. Assessor (Ind. Tax Ct. 2006)). The IBTR has reduced the value of the condominium to its purchase price.

Appraisals can be the best proof of the market value of a property’s use. But this is not true in all cases. The Indiana General Assembly protects taxpayers by not requiring them to spend time and resources on expensive appraisals when other relevant evidence may be sufficient to challenge a property’s appraisal.

Penny D. Jackson