INDIANA GOVERNMENT CENTER NORTH
100 NORTH SENATE AVENUE
N1058(B)
INDIANAPOLIS, IN 46204
PHONE (317) 232-3777
FAX (317)
232-8779
DEPARTMENT OF LOCAL GOVERNMENT FINANCE
Statement on Recent
News Story on Property Tax Assessments in Vigo County May 28, 2013
A
recent news story highly edited and mischaracterized the Department of Local
Government Finance's (Department) statements on property tax assessments and
misled viewers on how assessments are completed. The Department provides the
following information on property assessment to correct and clarify that
story.
As an initial matter, overall, assessments in Vigo County for the 2012
assessment decreased 7.4% from the previous year. Over the past several
months, the Department has met with local officials representing Vigo
County and Terre Haute addressing their concerns with the 2012
reassessment.
Assessments in Indiana are based on market value-in-use.
"Market value-in-use" is the value of property for a specified use. For
example, a residential home is valued as a place to live and not as commercial
property even if the highest and best economic use of the home site is
commercial.
In a process known as annual adjustment, or trending, the local
assessor uses real property sales data to adjust the assessed values in a
neighborhood to reflect the market value-in-use. There is no singular formula
for the local assessor to derive market value-in-use. Rather, the local
assessor is to rely on evidence, such as sales data, of the price that a
willing buyer would pay a willing seller for the property.
The Department's
primary role in property assessment is to provide clear and consistent rules and
guidelines and to review county ratio studies from a mass-appraisal
perspective. A ratio study is a comparison between sales prices and assessed
values of properties to ensure that market values are being used to determine
assessed values. The Department uses several statistical tests to determine
whether assessed values are consistent with property sales in the area. The
statistical tests are performed to ensure compliance with standards established
by the International Association of Assessing Officers (IAAO). Indiana law
requires this. If the IAAO standards are not met, the ratio
study cannot be
approved. The 2012 Vigo County Ratio Study is in compliance with IAAO standards
and can be viewed on the Department's website here:
http://www.in.gov/dlgf/files/VIGO_2012_RATIO_STUDY.pdf.
Additionally,
in response to concerns that assessed values in Vigo County were too low, the
Department conducted a second review of the Vigo County ratio study to verify
its compliance with IAAO standards.
Property owners who believe their
assessment does not reflect the market value-in-use of their property may
appeal their assessment to the County Property Tax Assessment Board of
Appeals (PTABOA). To file an appeal, taxpayers must contact their local
assessor in writing within 45 days of receiving the notice of assessment or tax
bill if a notice of assessment was not issued. If the issue with the
assessment cannot be resolved at the local level, the taxpayer may appeal the
PTABOA's decision to the Indiana Board of Tax Review (a state agency
specially-charged with hearing these appeals). If a taxpayer's assessment
increases by more than 5% from the preceding year, the local assessor has the
burden of proof to show that the assessment is correct.
The Department is
willing to explain the process of how property is assessed. Taxpayers may also
learn more about how properties are valued in the assessment process by
reviewing the online tutorials that serve as training for the Level I and
Level II Assessor-Appraiser Certifications:
http://www.in.gov/dlgf/7533.htm.
