Indiana Code § 6-1.1-20.6
provides taxpayers with a credit for excessive property taxes. That credit is
often called a “tax cap,” and it varies in amount depending on how a property
is classified:
A person is entitled to a credit
against the person’s property tax liability for property taxes first due and
payable after 2009. The amount of the credit is the amount by which the
person’s property tax liability attributable to the person’s:
(1) homestead exceeds one percent
(1%);
(2) residential property exceeds
two percent (2%);
(3) long term care property
exceeds two percent (2%);
(4) agricultural land exceeds two
percent (2%);
(5) nonresidential real property
exceeds three percent (3%); or
(6) personal property exceeds
three percent (3%);
of the gross assessed value of
the property that is the basis for the determination of property taxes for that
calendar year.
I.C. § 6-1.1-20.6-7.5(a).
b) For purposes of applying the
tax cap statute, “residential property” and “nonresidential real property” do
not necessarily carry their common meanings. Instead, they are specifically defined
as follows:
“Residential
property”
As used in this chapter,
“residential property” refers to real property that consists of any of the
following:
(1) A single family dwelling that
is not part of a homestead and the land, not exceeding one (1) acre, on which
the dwelling is located.
(2) Real property that consists
of:
(A) a building that includes two
(2) or more dwelling units;
(B) any common areas shared by
dwelling units; and
(C) the land, not exceeding the
area of the building footprint, on which the building is located.
(3) Land rented or leased for the
placement of a manufactured home or mobile home, including any common areas
shared by the manufactured homes or mobile homes.
I.C § 6-1.1-20.6-4
“Nonresidential
real property”
(a) As used in this chapter,
“nonresidential real property” refers to either of the following:
(1) Real property that:
(A) is not:
(i) a homestead; or
(ii) residential property; and
(B) consists of:
(i) a building or other land
improvement; and
(ii) the land, not exceeding the
area of the building footprint, on which the building or improvement is located.
(2) Undeveloped land in the
amount of the remainder of:
(A) the area of a parcel; minus
(B) the area of the parcel that
is part of:
(i) a homestead; or
(ii) residential property.
(b) The term does not include
agricultural land.
I.C. § 6-1.1-20.6-2.5
c) The subject parcel does not
qualify as residential property under the tax cap statute— it has no dwelling
units and is not leased for placement of a manufactured or mobile home. But it
does qualify as nonresidential real property because it is undeveloped land
that is not agricultural land, part of a homestead, or residential property as defined
by Ind. Code § 6-1.1-20.6-4. The Elkhart County Auditor therefore correctly applied
a 3% cap.
Conclusion
7. Because the subject parcel is
“nonresidential real property” under Ind. Code § 6-1.1-20.6-2.5(a)(2), the
Elkhart County Auditor correctly applied a credit in the amount by which the
parcel’s taxes exceeded 3% of its gross assessed value.
