Here, the Petitioner’s representative contends that the Petitioner’s property was assessed too high in 2011 based on its appraised value. Loughery testimony. In support of this contention, Mr. Loughery submitted an appraisal report prepared by Stephen Clifford that estimated the value of the Petitioner’s property to be $800,000 as of June 17, 2011. Board Exhibit A. Mr. Clifford is an Indiana Licensed Appraiser who certified that he prepared the property’s appraisal in accordance with USPAP. Id. While the relevant assessment date for the Petitioner’s appeal was March 1, 2011, the appraisal valued the property within about three months of that date. Furthermore, pursuant to 50 IAC 27-3-2, local assessing officials are instructed to use sales of properties occurring between January 1, 2010, and March 1, 2011, in performing sales ratio studies for the March 1, 2011, assessment date. Thus, because the appraiser used four sales that occurred in 2010 in his sales comparable analysis, the Board finds that the Petitioner’s appraisal is some evidence of the property’s market value-in-use for the 2011 assessment year. The Petitioner therefore raised a prima facie case that its property was over-valued. See Meridian Towers, 805 N.E.2d at 479.
Once the Petitioner raises a prima facie case that its property was over-valued, the burden shifts to the assessing official to rebut the Petitioner’s evidence. See American United Life Insurance Co. v. Maley, 803 N.E.2d 276 (Ind. Tax Ct. 2004). To rebut or impeach the Petitioner’s case, the Respondent has the same burden to present probative evidence that the Petitioner faced to raise its prima facie case. Fidelity federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005).
Here, the Respondent’s witness argued that the Petitioner’s property was valued correctly in 2011 based on the sale prices of four properties located in Eagle and Union Townships. Lewis testimony; Respondent Exhibit 6. But Ms. Lewis presented no evidence to show that the properties were comparable to the property under appeal and she made no attempt to adjust the sales for any differences between the properties. In fact, she just averaged the sale prices of the four properties and concluded that the sales supported the property’s assessed value. However, as the Indiana Tax Court stated in Fidelity Federal Savings & Loan v. Jennings County Assessor, 836 N.E.2d 1075, 1082 (Ind. Tax Ct. 2005), “the Court has frequently reminded taxpayers that statements that another property ‘is similar’ or ‘is comparable’ are nothing more than conclusions and conclusory statements do not constitute probative evidence. Rather, when challenging an assessment on the basis that the comparable property has been treated differently, the taxpayer must provide specific reasons as to why it believes the property is comparable. These standards are no less applicable to assessing officials.” 836 N.E.2d at 1082 (citations omitted and emphasis added). Thus, the Board finds that the Respondent’s market analysis is insufficient evidence to rebut the Petitioner’s appraisal.
Ms. Lewis also argued that the Board should give little weight to the Petitioner’s appraisal because the appraiser’s adjustments to his comparable properties for the site value, gross living area and basement finish were too low and because there were other sales the appraiser should have considered in valuing the Petitioner’s property. Lewis testimony. But Ms. Lewis identified no specific errors in the appraisal. Nor did she present any substantial reason to doubt the credibility of the appraiser or his work in appraising the subject property. To the extent that the she attempted to dispute the appraiser’s choice of comparable properties, this unsupported argument is not persuasive. It is well within an appraiser’s expertise to choose the sales he deems most comparable to the subject property and apply adjustments to those comparable properties to account for the differences between them. And while Ms. Lewis testified as to her opinion about more “proper” adjustments for the properties’ lot sizes, their gross living areas and basement finish, she failed to relate those “adjustments” to any specific value for the Petitioner’s property. Thus, Ms. Lewis’ evidence failed to sufficiently impeach the Petitioner’s evidence.
Finally, the Respondent argued that the Petitioner’s property was properly assessed based on its cost. Truitt argument. In support of this contention, the Respondent’s counsel offered a summary sheet purporting to show that a building permit was issued to the Petitioner’s contractor and that the permit identified the cost of building the house to be $1,027,000. Respondent Exhibit 11. A party may offer actual construction costs compiled in accordance with generally accepted appraisal principles to establish a property’s market value-in-use. MANUAL at 5. But while Mr. Loughery agreed that the Petitioner purchased the lot for $240,000, he never testified that the $1,027,000 reported on the summary sheet represented the cost to construct the house on the lot. The Respondent could have served discovery and requested the construction contracts from the Petitioner. Or the Respondent’s counsel could have simply asked Mr. Loughery under oath if the amount recorded on the summary sheet represented the amount that the Petitioner paid to construct the house. But he did not. Mr. Loughery simply read the value on the summary sheet and agreed that it was described as the “construction cost” on the document. Granted, Mr. Loughery did not object to the summary sheet; nor did he testify that the summary sheet was in error or that the building permit did not actually reflect the costs of building the home. But Mr. Truitt never asked whether the $1,027,000 was the actual cost to construct the Petitioner’s house and the Board will not speculate on what Mr. Loughery’s answer would have been had the question been raised.
Thus, the Respondent’s summary sheet alone is insufficient evidence of the property’s cost to rebut the Petitioner’s appraisal.
However, as the Respondent’s witness argued, the Petitioner’s appraiser valued the property at $1,133,714 using the cost approach. Despite his $1,133,714 cost valuation, the Petitioner’s appraiser “reconciled” the property’s value to be $800,000 – which is identical to the value he determined under the sales comparison approach. Thus, the appraiser appears to have completely disregarded his cost approach valuation in his final reconciliation of value. At a minimum, the appraiser failed to explain why there was such a difference between the value he estimated under the cost approach and the value he estimated under the sales comparison approach or why he gave no weight to his cost analysis despite the fact that the Petitioner’s house was newly constructed.
Thus, while the Board is hesitant to disregard an appraiser’s “reconciliation” of values between the various valuation approaches, there was a close correlation between the cost approach estimated by the Petitioner’s appraisal and the construction cost reported on the Respondent’s summary of building permits issued by the county. And Mr. Loughery failed to dispute the value reported as “construction cost” on the Respondent’s summary sheet. Finally, the Petitioner’s house was newly constructed and there was nothing in the appraisal to support a finding that the cost analysis was somehow unreliable. Therefore the Board finds that the Petitioner’s appraiser’s cost approach value of $1,133,700 (rounded) is better evidence of the property’s value for 2011 than the appraiser’s sales comparison value of $800,000 or the appraisal’s “reconciled value” of $800,000.
