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Indiana Property Tax Reassessment: Will you know how to navigate the changes?

All real property in Indiana is undergoing a reassessment as of March 1, 2012, with the new assessed values serving as the basis for taxes payable in 2013. Separately, recent legislation has brought changes to the appeals process. Will you know how to navigate these changes?

The last statewide reassessment used March 1, 2002 as the assessment date, and those values were based on an even earlier valuation date of Jan. 1, 1999. For the past several years, assessing officials have typically been using sales data to annually adjust or “trend” assessed values.  The current reassessment, however, will employ updated construction cost data. Additionally, there is no longer a distinction between the valuation date and the assessment date: the new assessed values are intended to reflect “market value-in-use” as of March 1, 2012.

Receiving notice of your property’s new assessed value
Assessors are required to issue a notice of the March 1, 2012 assessed values to property owners. Typically, assessors use a form known as the “Form 11 Notice of Assessment,” although they will have the option to provide notice by email after Jan. 1, 2013.  Assessing officials have completed the physical inspection of over 99 percent of all parcels of real estate in Indiana, with data entry completed on over 98 percent of all parcels. Thus, some assessment notices may be issued as early as this summer, with many being sent this fall. However, some notices may not be sent until early 2013. A taxpayer has only 45 days from the date the notice is sent in which to appeal the assessed value. Because of the importance of the Form 11 Notice, taxpayers may want to confirm that their mailing address on record at the assessor’s office is correct.

Navigating the local appeal process
Effective July 1, 2012, recent legislation has added some procedural complexity to the local appeal process. The process of filing an appeal and engaging in an informal settlement conference with the assessing official remains the same, but recent legislation has affected the procedure for hearings before a county property tax assessment board of appeals. The board is now required to give 30 days’ notice in advance of a hearing, whereas it was previously required to give only 10 days’ notice. There are also now several pre-hearing filing deadlines for taxpayers, including a deadline to:

  • file a request to postpone and reschedule the hearing; 
  • file a request that the hearing be decided on the evidence submitted in the taxpayer's absence; or
  • file a withdrawal of the appeal.

Taxpayers are required to make these filings with the board and also with the assessing official, thus setting up a procedure that more closely resembles civil litigation. Recent legislation also imposes a fine if a taxpayer or taxpayer representative fails to appear at a hearing before the board, unless the taxpayer has complied with pre-hearing deadlines for notifying the board of his or her absence. This is another reason for a taxpayer to be proactive in confirming that notices from the county are being sent to the correct address.

Types of evidence permitted in the appeal process
Also effective July 1, 2012, new legislation will have an impact on the types of evidence that can be used in appeal proceedings that are pending or commenced after July 1, 2012 (this includes appeals pending before the county property tax assessment board of appeals, as well as those that have been appealed to the Indiana Board of Tax Review). Both taxpayers and assessing officials will be allowed to introduce evidence of the assessed values of comparable properties in order to show what the market value-in-use should be for the property under appeal. For residential property, comparables must be limited to the same taxing district as the property under appeal or within two miles of the boundary of that taxing district. For non-residential property, there is no geographic restriction on comparables, although preference is given to comparables in the same taxing district as the property under appeal or within two miles of the boundary of that taxing district. The determination as to whether a property is “comparable” is to be made using generally accepted appraisal and assessment practices.

The ability to use assessed values as evidence on appeal will allow a taxpayer to use an easily accessible source of information to preliminarily check whether his or her property is being assessed too high, although this is certainly not the only indication of whether a particular property is being assessed too high. Although the legislation allowing the use of assessed values as evidence is likely intended to reduce some of the effort and expense that would otherwise be involved in obtaining a professional appraiser’s opinion of value in order to carry the burden of proof on appeal, disputes will remain as to whether a property is truly comparable to the subject, and the most authoritative evidence on this point would likely be the opinion of an independent professional appraiser.

Burden of proof
Because the updated construction cost information used for reassessment could yield an increase in assessed value, the reassessment is also likely to trigger, in many cases, a statute that places the burden of proof on the assessor in an appeal. If a property's assessment increases by more than 5 percent over the March 1, 2011 assessed value determined by the assessor for the same property, then the assessor will bear the burden of proof on appeal to show that the new assessed value is correct. This burden remains with the assessor throughout the appeal process all the way to the Indiana Tax Court.

If you have questions regarding these assessment or appeal processes, please contact a member of the Real Estate Practice Group at Bingham Greenebaum Doll LLP.

DISCLOSURE REQUIRED BY CIRCULAR 230.  This Disclosure may be required by Circular 230 issued by the Department of Treasury and the Internal Revenue Service.  If this article, including any attachments, contains any federal tax advice, such advice is not intended or written by the practitioner to be used, and it may not be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.  Furthermore, any federal tax advice herein (including any attachment hereto) may not be used or referred to in promoting, marketing or recommending a transaction or arrangement to another party.  Further information concerning this disclosure, and the reasons for such disclosure, may be obtained upon request from the author of this article. Thank you.

  • Partner

    Brad is a partner in the firm’s Tax and Employee Benefits department. He represents clients across Indiana in matters related to real and personal property taxation, including assessment appeals, requests for tax exemption



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