The Petitioners argue that the county erred when it denied the
model residence deduction on 636 Musket Drive in 2008. Robinson testimony;
Carmin argument.
Indiana Code § 6-1.1-12.6-2 grants a “deduction from the
assessed value of the model residence in the amount of fifty percent (50%) of
the assessed value of the model residence” for one year while the residence is
assessed as a partially completed structure and for up to three years after the
model residence is first assessed as a completed structure. Ind. Code §
6-1.1-12.6-2. The deduction is terminated if the property is sold “after the
assessment date of that year, but before January 1 of the following year” to a
person that does not continue to use the property as a model residence. Id.
Indiana Code defines a “model residence” as “real property
that consists of a single family residence…that: (1) has never been occupied as
a principal residence; and (2) is used for display or demonstration to
prospective buyers or lessees for purposes of potential acquisition or lease of
a similar type residence, townhouse, or condominium on: (A) the same property;
or (B) other property.” Ind. Code § 6-1.1-12.6-1(a). The term “property” does
not include any of the land on which the residence is located. Ind. Code §
6-1.1-12.6-1(b). The “owner‟s
regular office space may not be considered a model residence…” Id. However,
the statute “does not prohibit the use of the garage or other space in the real
property: (1) to store or display material used to promote the real property or
other similar properties; or (2) as a space for meetings with prospective
buyers or lessees.” Ind. Code § 6-1.1-12.6-1(c).
While Indiana Code § 6-1.1-12.6-1, as enacted, only applied to
assessment dates “in 2009 or a later year,” P.L. 167-2009 was passed the
following year to retroactively extend the deduction to the 2008 assessment
year. Respondent Exhibit F. Prior to its expiration in 2011, Indiana
Code § 6-1.1-12.6-2.1(a) applied to a model residence “that is first assessed
as: (1) a partially completed structure; or (2) a fully completed structure;
for the assessment date in 2008 and was still a model residence on January 1,
2009.” Ind. Code § 6-1.1-12.6-2.1(a) (expired January 1, 2011). The “owner of a
model residence is entitled to a deduction from the assessed value of the model
residence in the amount of fifty percent (50%) of the assessed value of the
model residence for the 2008 assessment date.” Id.
Here, Mrs. Robinson testified that the property under appeal
is a single-family residence located on lot 31 in the Greenbrier Knolls
subdivision. Robinson testimony. According to Mrs. Robinson, the
Petitioners in the normal course of their business develop and build homes in
the Greenbrier Knolls, Deer Run, and Greenbrier Meadows subdivisions. Id. Further,
Mrs. Robinson testified, the subject house was completed and assessed on March
1, 2008. Id. The house was unoccupied; there was literature on the
various styles and types of homes available for construction by the Petitioners
on display in the house; and the house was used as a “model home” until it sold
on February 5, 2010. Id.; Petitioner Exhibits 7 through 14. Six of the
ten homes sold by the Petitioners in 2009 and 2010 resulted from prospective
buyers touring the property to view the Petitioners‟ quality of workmanship. Id.
The Respondent, however, argues that the Petitioners’ property
is a “spec” home; rather than a model residence. Sharp testimony. While
the statute is “vague” on the definition of model residence, Mrs. Sharp argues
that a model home represents the type and style of house that will be built in
a neighborhood. Sharp testimony. According to Mrs. Sharp, a model home
will have signage in the front yard that publishes the normal hours the
property can be viewed and there is a person on-site to answer questions and
sell similar houses on other lots in the neighborhood. Id.; Respondent
Exhibit C. Mrs. Sharp testified that a model home is landscaped and the
house is furnished. Sharp testimony. Moreover, a model home is typically
the last house sold in the neighborhood and it sells at a significantly reduced
price. Sharp testimony. To the contrary, Mrs. Sharp argues, a “spec”
home is built by a builder with the expectation of finding a buyer to sell it
to. Id. According to Mrs. Sharp, the Petitioners‟ property is just an empty house in a neighborhood, with a
for-sale sign in the yard that required an appointment to view. Id.;
Respondent Exhibit B.
Indiana Code § 6-1.1-12.6-1 does not require a “model
residence” to have signage in the yard, posted business hours, a salesperson
on-site, or landscaping or furnishings to qualify for the model residence
deduction. The statute merely states that the property must be a single family
residence that has never been occupied as a principal residence, that is used
for display or demonstration to prospective buyers. “When faced with a question
of statutory interpretation, this Court looks first to the plain language of
the statute. Where the language is unambiguous, the Court has no power to
construe the statute for the purpose of limiting or extending its operation.” Joyce
Sportswear Co. v. State Bd. of Tax Comm’rs, 684 N.E.2d 1189, 1192 (Ind. Tax
Ct. 1997), review denied. While signage, landscaping and on-site sales
personnel may make it easier to determine that a property is a “model
residence,” nothing in the statute requires such amenities. More importantly,
while such amenities may be common with larger home-builders, there was no
evidence that small companies exhibit or display their models in the same manner.
Here, the undisputed evidence shows that the Petitioners‟ property located at 636
Musket Drive was a single-family residence; it was not occupied as a primary
residence until after it was sold on February 5, 2010; and the house was shown
to at least six prospective buyers in 2009 and 2010 resulting in a contract for
the Petitioners to build other houses in the neighborhood. Therefore, the Board
finds that the Petitioners are entitled to the model residence deduction on the
subject property for the 2008 assessment year.
