Sunday, June 9, 2013

DLGF Objects to News Report Related to Vigo County Assessments

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.