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.