Before reaching the merits of the case, the Board must
determine if Mr. Masterson had standing to bring this appeal. The Respondent
contends that because the Petitioner was not the owner of the property on March
1, 2010, and the seller provided funds to pay the real estate taxes for the
2010, assessment year, Mr. Masterson has no right to appeal the property's 2010 assessment.
Under the Board's regulations, a “Party” includes the “(1) the owner of the property; [or] (2)
The taxpayer responsible for the property taxes payable on the subject
property…” 52 IAC 2-2-13. Thus, the fact that the Petitioner was not the owner
of the property on the March 1, 2010, assessment date does not automatically
deprive the Petitioner of standing to appeal his property's assessment.
Here, Mr. Masterson testified that the former property owner
paid taxes based on a significantly lower assessed value; leaving Mr. Masterson
responsible for the remainder of the unallocated amount. In fact, the agreement
between Mr. Masterson and the seller of the property recognized that Mr.
Masterson might be responsible for unreimbursed taxes for the 2010 assessment
year: “the payment/proration and/or credit of taxes are based on the most
current bills at this time. As a result of action by the Indiana State
Legislature, it is not possible to provide accurate pro-rations of taxes due
and payable into the future.” Petitioner Exhibit 9. Further, even if Mr.
Masterson had not been required to pay a portion of the unreimbursed property
taxes for 2010, he was still the person billed for the property's 2010 taxes and who
ultimately paid the property taxes. Therefore Mr. Masterson had standing to
bring this appeal.
The Respondent failed to establish a prima facie case that the
property's March 1,
2010, assessment was correct. The Board reached this decision for the following
reasons:
...
Here, the Respondent presented fourteen sales from the
neighborhood and an adjacent neighborhood that occurred in 2009. According to
the Respondent, the average price per square foot was $75 and the median price
per square foot price was $65. The Respondent also submitted MLS information
for four sales with prices ranging from $47 per square foot to $81 per square
foot. The Respondent contends that all of the sales were of single-family homes
similar in size, age, location, and style to the Petitioner's property. Because the
subject property was assessed for only $51 per square foot, the Respondent
argues, the property was not over-valued for the March 1, 2010, assessment.
In making this argument, the Respondent essentially relies
on a sales comparison approach to establish the market value-in-use of the
Petitioner's property.
See MANUAL at 3 (stating that the sales comparison approach “estimates
the total value of the property directly by comparing it to similar, or
comparable, properties that have sold in the market.”). In order to effectively
use the sales comparison approach as evidence in a property assessment appeal,
however, the proponent must establish the comparability of the properties being
examined. Conclusory statements that a property is “similar” or “comparable” to
another property do not constitute probative evidence of the comparability of
the properties. Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 470 (Ind.
Tax Ct. 2005). Instead, the proponent must identify the characteristics of the
subject property and explain how those characteristics compare to the
characteristics of the purportedly comparable properties. Id. at 471.
Similarly, the proponent must explain how any differences between the
properties affect their relative market values-in-use. Id. This the
Respondent did not do. Ms. Phillips merely testified that the properties were
similar in characteristics and location to the subject property. This falls far
short of the burden to show comparability between the properties.
The Respondent failed to establish a prima facie case that
the property's assessed value was correct for the March 1, 2010, assessment date. Therefore,
the property's assessment must be reduced to the previous year's assessed value of $65,500 under Indiana Code §
6-1.1-15-17.2. That, however, does not end the Board's inquiry because the Petitioner requested an assessed
value of $19,000 for the property based on his purchase of the property. As
explained above, the Petitioner has the burden of proving that he is entitled
to that additional reduction. The Board therefore turns to the Petitioner's evidence.
The Petitioner presented probative evidence that the
property's assessment
should be lowered to $19,000 for the 2010 assessment year. The Board reached
this decision for the following reasons:
The Petitioner purchased the property at issue in this
appeal on February 28, 2011, for $19,000. The sale of the subject property is
often the best evidence of the 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). The Petitioner, however, bought the subject
property a year after the relevant March 1, 2010, valuation date. Thus, by
itself, the Petitioner's purchase price is not probative of the property's true tax value. Mr. Masterson needed to explain how the
sale price related to the property's value as of March 1, 2010.
Mr. Masterson testified that the property was originally
listed for $52,900, but the listing price decreased to $24,500. The house sat
vacant for eighteen months before he purchased the property. During that time,
the plumbing froze and the “house was trashed.” By themselves, listings
typically do little to show a property's market value-in-use, but an eighteen-month listing that
ultimately results in a sale at or below the list price is much more
persuasive; particularly where, as here, the property was actively listed on
the relevant valuation date. More importantly, the Tippecanoe County Circuit
Court affirmatively found that the value of the subject property was $19,000 in
an order dated December 2, 2010. This determination was issued within nine
months of the March 1, 2010, valuation date. Considering the totality of the
evidence, the Board finds that Mr. Masterson raised a prima facie case that the
subject property's true tax value was no more than $19,000 for 2010.
