…
Here, the Petitioner‘s
representative contends that the Petitioner‘s properties were over-valued in
2010 based on the Petitioner‘s purchase price of $6,000 for both parcels at an
auction on August 4, 2009. Markiewicz testimony; Petitioner Exhibits 3 and
6. The purchase price of a property can be the best evidence of a
property‘s value. See Hubler Realty Co. v. Hendricks County Assessor, 938
N.E.2d 311, 315 (Ind. Tax Ct. 2010) (finding that the Board‘s determination
assigning greater weight to the property‘s purchase price than its appraised
value was proper and supported by the evidence). However, a sale does not
necessarily indicate the market value of a property unless the sale happens in
a competitive and open market under all conditions requisite to a fair sale, in
which the buyer and seller are typically motivated. MANUAL at 10.
“‘Fair market value‘ is what a willing buyer, under no compulsion to buy, would
pay a willing seller, under no compulsion to sell.” Second National Bank
of Richmond v. State, 366 N.E.2d 694, 696 (Ind. Ct. App. 1977).
While the Petitioner‘s
representative testified that the developer was under financial distress, which
led to the auction sale, the Board recognizes that there may be situations
where enough properties in an area are sold in forced sales or are otherwise
sold under duress as to effectively constitute the market. According to the
Petitioner, there had only been one house built in the neighborhood in five
years – and that house was constructed on one of the lots purchased in the
auction. Markiewicz testimony. Further, 144 lots were being auctioned in
2009. Petitioner Exhibit 3. Thus, because the developer had been unable
to sell a single lot for construction in five years and because 144 lots were
offered at auction, there is sufficient evidence to conclude that the purchase
price of the parcels sold at the August 4, 2009, auction reflected the market
in that neighborhood. Moreover, the Petitioner‘s representative testified that
three brokers had listed lots in the neighborhood for sale for as little as
$5,000, but none of the lots had sold. While Mr. Markiewicz‘s hearsay testimony
cannot form the sole basis for the Board‘s decision, it tends to
support the Petitioner‘s $6,000 purchase price for two lots. Given the totality
of the circumstances, the price that the Petitioner paid for the subject
properties is some evidence of the properties’ market value-in-use.
Once the Petitioner establishes
a prima facie case, the burden shifts to the Respondent to rebut the
Petitioner‘s evidence. See American United Life Insurance Co. v. Maley, 803
N.E.2d 276 (Ind. Tax Ct. 2004). Here, the Respondent claimed that the
properties’ assessments were valid because (1) the assessment/sale ratios of
other properties fell within statistically acceptable ranges and (2) all
properties in the Petitioners’ neighborhood were assessed consistently. But the
Respondent offered no support for her underlying premise—that an assessment is
correct even if it exceeds a property‘s market value-in-use as long as
assessments in general are within acceptable statistical ranges for measuring
the overall uniformity, equality, and accuracy of mass appraisals. To the
contrary, an individual taxpayer has the right to appeal his or her property‘s
assessment on grounds that the assessment does not accurately reflect the
property‘s market value-in-use. See MANUAL
at 5 (allowing a taxpayer to offer
evidence of a property‘s market value-in-use to rebut assessment and to show
property‘s actual true tax value). And that right exists independently of any
constitutional or statutory requirements for uniform and equal assessments.
Similar facts and a similar decision are also found in the Norris case:
