Board Finds Property's Purchaser Had Standing to Appeal Property's Taxes and Purchase Price Supported a Reduction in Property's Assessed Value

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Before reaching the merits of the case, the Board mustdetermine if Mr. Masterson had standing to bring this appeal. The Respondentcontends that because the Petitioner was not the owner of the property on March1, 2010, and the seller provided funds to pay the real estate taxes for the2010, assessment year, Mr. Masterson has no right to appeal the property's 2010 assessment.
Under the Board's regulations, a “Party” includes the “(1) the owner of the property; [or] (2)The taxpayer responsible for the property taxes payable on the subjectproperty…” 52 IAC 2-2-13. Thus, the fact that the Petitioner was not the ownerof the property on the March 1, 2010, assessment date does not automaticallydeprive the Petitioner of standing to appeal his property's assessment.
Here, Mr. Masterson testified that the former property ownerpaid taxes based on a significantly lower assessed value; leaving Mr. Mastersonresponsible for the remainder of the unallocated amount. In fact, the agreementbetween Mr. Masterson and the seller of the property recognized that Mr.Masterson might be responsible for unreimbursed taxes for the 2010 assessmentyear: “the payment/proration and/or credit of taxes are based on the mostcurrent bills at this time. As a result of action by the Indiana StateLegislature, it is not possible to provide accurate pro-rations of taxes dueand payable into the future.” Petitioner Exhibit 9. Further, even if Mr.Masterson had not been required to pay a portion of the unreimbursed propertytaxes for 2010, he was still the person billed for the property's 2010 taxes and whoultimately paid the property taxes. Therefore Mr. Masterson had standing tobring this appeal.
The Respondent failed to establish a prima facie case that theproperty's March 1,2010, assessment was correct. The Board reached this decision for the followingreasons: ...
Here, the Respondent presented fourteen sales from theneighborhood and an adjacent neighborhood that occurred in 2009. According tothe Respondent, the average price per square foot was $75 and the median priceper square foot price was $65. The Respondent also submitted MLS informationfor four sales with prices ranging from $47 per square foot to $81 per squarefoot. The Respondent contends that all of the sales were of single-family homessimilar in size, age, location, and style to the Petitioner's property. Because thesubject property was assessed for only $51 per square foot, the Respondentargues, the property was not over-valued for the March 1, 2010, assessment.
In making this argument, the Respondent essentially relieson a sales comparison approach to establish the market value-in-use of thePetitioner's property.See MANUAL at 3 (stating that the sales comparison approach “estimatesthe total value of the property directly by comparing it to similar, orcomparable, properties that have sold in the market.”). In order to effectivelyuse the sales comparison approach as evidence in a property assessment appeal,however, the proponent must establish the comparability of the properties beingexamined. Conclusory statements that a property is “similar” or “comparable” toanother property do not constitute probative evidence of the comparability ofthe properties. Long v. Wayne Twp. Assessor, 821 N.E.2d 466, 470 (Ind.Tax Ct. 2005). Instead, the proponent must identify the characteristics of thesubject property and explain how those characteristics compare to thecharacteristics of the purportedly comparable properties. Id. at 471.Similarly, the proponent must explain how any differences between theproperties affect their relative market values-in-use. Id. This theRespondent did not do. Ms. Phillips merely testified that the properties weresimilar in characteristics and location to the subject property. This falls farshort of the burden to show comparability between the properties.
The Respondent failed to establish a prima facie case thatthe property's assessed value was correct for the March 1, 2010, assessment date. Therefore,the property's assessment must be reduced to the previous year's assessed value of $65,500 under Indiana Code §6-1.1-15-17.2. That, however, does not end the Board's inquiry because the Petitioner requested an assessedvalue of $19,000 for the property based on his purchase of the property. Asexplained above, the Petitioner has the burden of proving that he is entitledto that additional reduction. The Board therefore turns to the Petitioner's evidence.
The Petitioner presented probative evidence that theproperty's assessmentshould be lowered to $19,000 for the 2010 assessment year. The Board reachedthis decision for the following reasons:
The Petitioner purchased the property at issue in thisappeal on February 28, 2011, for $19,000. The sale of the subject property isoften the best evidence of the property's value. See Hubler Realty Co. v. HendricksCounty Assessor, 938 N.E.2d 311, 315 (Ind. Tax Ct. 2010) (finding that theBoard's determinationassigning greater weight to the property's purchase price than its appraised value was proper andsupported by the evidence). The Petitioner, however, bought the subjectproperty a year after the relevant March 1, 2010, valuation date. Thus, byitself, the Petitioner's purchase price is not probative of the property's true tax value. Mr. Masterson needed to explain how thesale price related to the property's value as of March 1, 2010.
Mr. Masterson testified that the property was originallylisted for $52,900, but the listing price decreased to $24,500. The house satvacant for eighteen months before he purchased the property. During that time,the plumbing froze and the “house was trashed.” By themselves, listingstypically do little to show a property's market value-in-use, but an eighteen-month listing thatultimately results in a sale at or below the list price is much morepersuasive; particularly where, as here, the property was actively listed onthe relevant valuation date. More importantly, the Tippecanoe County CircuitCourt affirmatively found that the value of the subject property was $19,000 inan order dated December 2, 2010. This determination was issued within ninemonths of the March 1, 2010, valuation date. Considering the totality of theevidence, the Board finds that Mr. Masterson raised a prima facie case that thesubject property's true tax value was no more than $19,000 for 2010.
http://www.in.gov/ibtr/files/Materson_79-156-10-1-5-00001.pdf