Both parties agreed the 2006
assessment under appeal increased more than 5% from the assessor’s 2005
assessment. Therefore, the Respondent had the burden of proving that the 2006
assessment is correct. In other words, the Respondent needed to prove the 2006
assessed value is an accurate measure of market value-in-use. See Eckerling
v. Wayne Twp. Assessor, 841 N.E.2d 674, 678 (Ind. Tax Ct. 2006).
…
The Respondent
presented evidence regarding the sales of four comparable properties located in
close proximity to the subject property. All of the comparable properties are
tourist homes like the subject and are located in the downtown Nashville area,
except for one that is located up the hill approximately a half mile. One of
the properties, 176 West Mound Street, sold twice. The first sale took place in
February 2004, and the second sale was in July 2006. The respective adjusted
sale prices were $182,500 and $197,500. Both of those values are greater than
the subject’s assessed value.
Mr. Kelly’s
sales analysis shows the similarities and the differences between each
comparable and the subject property. All sales occurred from February 2004 to
July 2006. The dates of the comparables sales are relevant because a party must
explain how its evidence relates to the appealed property’s market value-in-use
as of the relevant valuation date. See O’Donnell v. Dep’t of Local Gov’t
Fin., 854 N.E.2d 90, 95 (Ind. Tax Ct. 2006); see also, Long v. Wayne
Twp. Assessor, 821 NE2d 466, 471 (Ind. Tax Ct 2005). Otherwise, the
evidence lacks probative value. Id. For March 1, 2006 assessments, the
valuation date is January 1, 2005. 50 IAC 21-3-3 (2006). Therefore, the closer
the comparable sale dates are to the valuation date, the more probative the
evidence. Here, the comparable sale closest to the subject property had an
adjusted sale price of $180,000 and sold in May 2004. The sale prices of the
comparables were adjusted to demonstrate what affect the differences would have
on value and to arrive at an adjusted sale price for each comparable. All of
the adjusted sale prices are greater than the assessed value of the subject
property. Mr. Kelly, therefore, presented market value evidence that indicates
the subject’s assessment is below its market value-in-use.
The Respondent
also argued that the subject property was assessed correctly based on the
assessed values of eight other tourist homes in the county. Pursuant to Indiana
Code §6-1.1-15-18(c), “To accurately determine market-value-in-use, a taxpayer
or an assessing official may … introduce evidence of the assessments of
comparable properties located in the same taxing district or within two (2)
miles of a boundary of the taxing district….” The “determination of whether
properties are comparable shall be made using generally accepted appraisal and
assessment practices.” Id. In support of his contention, Mr. Kelly
submitted a summary sheet and property record cards for the subject property
and other tourist homes in the area that did not sell, within the time frame
considered relevant to the January 1, 2005, valuation date. He based his
comparison on an assessed value per square foot basis. This was purportedly
evidence as to the subject’s market value. While it does demonstrate the
subject tourist home was assessed at the low range of the other tourist homes
used in the analysis and could have been persuasive to demonstrate the subject
property is not over-assessed, the Respondent failed to successfully argue this
point.
In order to
effectively use a comparison approach as evidence in an assessment appeal, a
party must first demonstrate that the properties being examined are comparable
to each other. Conclusory statements that a property is similar or comparable
to another property are not probative of the properties’ comparability. Long
v. Wayne Twp. Assessor, 821 N.E.2d 466, 470-471 (Ind. Tax Ct. 2005).
Instead, a party must identify the characteristics of the property under appeal
and explain how those characteristics compare to the characteristics of the
purportedly comparable properties. The party must also explain how any
differences between the properties affect their relative market values-in-use. Id.
The Respondent
did not offer the type of analysis contemplated by the Indiana Tax Court in Long.
The only similarities mentioned between the subject and the comparables is that
they are all tourist homes characterized as residential and located in
Nashville. Mr. Kelly did little to quantitatively or qualitatively show how the
differences between the properties affect their relative values. The property
record cards provide no way to compare the assessed values of each of the
properties. The subject property was assessed for $162,500; whereas the
“comparable” properties ranged from $123,000 to $350,700, with no explanation
of how the assessor arrived at any of the values. This is not probative
evidence that the subject’s assessed value was correct or too low.
As stated
previously, the Respondent successfully established the comparability of the
properties used in his sales comparison analysis. Mr. Kelly identified the
characteristics of the subject property and explained how those characteristics
compared to or differed from the characteristics of the purportedly comparable
properties and then made the necessary adjustments in order to reach the
relative market values-in-use. Because the Respondent has made a prima facie
case, the burden of proof shifts to the opposing party to refute or disprove
the evidence. See Meridian Towers East & West v. Washington Township
Assessor, 805 N.E.2d 475, 479 (Ind. Tax Ct. 2003).
Here, the
Petitioner focused his attention and argument on the fact that the effective
age of the subject had been changed to adjust its assessed value. He opined
that the assessor can change only the condition of property to bring it to or
closer to the market value.
The Petitioner
failed to offer substantial probative evidence about what would have been a
more accurate market value-in-use. Mr. Smith merely focused on the use of
changing the effective age to bring the true tax value closer to the market
value-in-use. Essentially, he challenged the methodology used to develop the
property’s assessed value. Evidence and arguments regarding strict application
of the Guidelines, however, are not enough to prove that an existing assessment
must be changed. See Eckerling v. Wayne Twp. Assessor, 841 N.E.2d 674
(Ind. Tax Ct. 2006) (stating “when a taxpayer chooses to challenge an
assessment, he or she must show that the assessor's assessed value does not
accurately reflect the property's market value-in-use. Strict application of
the regulations is not enough to rebut the presumption that the assessment is
correct.”) The Petitioner did not show how the assessor's methodology resulted
in an assessment that fails to accurately reflect market value-in-use.
Mr. Smith
presented the assessments of six purportedly comparable properties. While he
stated that the effective age was different than the year built for each of the
comparables, two of them actually had the same effective age as the year built.
Beyond the fact that Mr. Smith failed to present any meaningful analysis
demonstrating how the comparables are actually comparable to the subject, his
argument was focused on methodology and not on the actual market value.
Therefore, this was not probative evidence of a relevant point to the outcome
of this case. See ¶15 (g) above.
The Petitioner
stated that the IAAO requires equity within groups and between groups. He
failed to explain, however, how this information affects the market value of
the subject property. Mr. Smith illustrated that, like the subject property,
many properties in downtown Nashville had their effective age changed to bring
the true tax value closer to market value-in-use.
Mr. Smith
presented a State Board of Accounts special examination of the 2002
reassessment. He failed to relate this examination of a state agency, which has
no authority in the mass assessments process, to his contention that the
current assessment is in error.
Finally, Mr.
Smith introduced an email from Frank Kelly to the Respondent in which he
recommends adjusting the effective age of many properties to obtain a better
measure of true tax value. Mr. Kelly cautions that this should be done with
proof of underlying property value, such as a sale or an appraisal. Again, Mr.
Smith failed to relate this information to his contention that the current
assessment is in error.
