Appraisals can be costly to prepare, in terms of dollars spent and time invested.  Taxpayers would be at a disadvantage if they were compelled in every case to pay for appraisals to support claims of excessive assessments. While appraisals are often the best evidence of value, they are not the only persuasive evidence.  The Indiana General Assembly has said appraisals may not be required to bring or prosecute taxpayers’ assessment appeals.  Two statutes clearly make this point.  Indiana Code § 6-1.1-15-1.2(h) provides, “[T]he taxpayer is not required to have an appraisal of the property in order to initiate the [assessment] appeal or prosecute the appeal.”  Indiana Code § 6-1.1-15-3(f) confirms that appraisals are not required in appeals beyond the county board to the Indiana Board of Tax Review (IBTR), stating “[T]he taxpayer is not required to have an appraisal of the property” to initiate and prosecute an appeal.”

The 2021 Real Property Assessment Manual, at 3, emphasizes that appraisals, while potentially relevant and persuasive, are not required:

Any evidence relevant to the true tax value of the property as of the assessment date may be presented to rebut the presumption of correctness of the assessment. Such evidence may include an appraisal prepared in accordance with generally recognized appraisal standards. However, there is no requirement that an appraisal be presented either to support or to rebut an assessment. Instead, the validity of the assessment shall be evaluated on the basis of all relevant evidence presented. Whether an assessment is correct shall be determined on the basis of whether, in light of the relevant evidence, it reflects the property’s true tax value as defined in this manual.

Appraisals are often considered the “best evidence” of value. The Indiana Tax Court has expressed a preference for appraisals. In Kooshtard Property VI, LLC v. White River Tp. Assessor (2005), it observed: “The Court believes (and has for quite some time) that the most effective method to rebut the presumption that an assessment is correct is through the presentation of a market value-in-use appraisal, completed in conformance with the Uniform Standards of Professional Appraisal Practice (USPAP).”

But appraisals do not always “win the day.”  In Wigwam Holdings LLC v. Madison County Assessor (2019), the Tax Court explained that its prior decisions do not “indicate that there is a per se rule that merely presenting a USPAP-compliant appraisal establishes a prima facie case for an assessment reduction.”  Instead, “it is well-established that to rebut the presumption that an assessment is correct, a taxpayer must make a prima facie case by presenting probative evidence to the” IBTR.  The parties in Wigwam Holdings agreed that the subject property was a special purpose property; therefore, the taxpayer’s appraisal “that estimated the Wigwam’s market value, without something more, simply does not constitute probative evidence of the property’s market value-in-use.”  The appraisal did not address the central question in the case, i.e. what was the property’s market value-in-use as of the assessment date, and therefore did not support a reduction in assessed value.

A recent IBTR decision illustrates how a taxpayer can win without an appraisal.  In Matkovic v. Boone County Assessor (Aug. 18, 2021), the taxpayers argued that the October 31, 2019 sale price of their condominium (which was lower than the 2020 assessed value) supported an assessment reduction as of the January 1, 2020 assessment date.  The IBTR observed, “a timely, arm’s-length sale of a property after it has been exposed to the market is still potent evidence of the property’s market value-in-use, even if its not unassailable.”  In addition, the IBTR noted: “A party may also offer actual construction costs, sale or assessment information for the property under appeal or comparable properties, and any other information compiled according to generally accepted appraisal principles.” (citing Eckerling v. Wayne Twp. Assessor (Ind. Tax Ct. 2006)). The IBTR reduced the condominium’s value to its purchase price.

Appraisals can be the best evidence of a property’s market value-in-use.  But that is not true in every case.  The Indiana General Assembly protects taxpayers by not compelling them to spend time and resources on pricy appraisals when other relevant, probative evidence may be sufficient to challenge a property’s assessment.