Indiana Tax Court rules in favor of Housing Partnerships

INDIANAPOLIS — The Indiana Tax Court has ruled that Housing Partnerships, Inc. Rental Program qualifies for property tax exemption.

In an Aug. 4 decision, the court upheld the determination of the Indiana Board of Tax Review (IBTR), concluding that “substantial and reliable evidence supports the Indiana Board’s determination that Housing Partnerships’ properties qualified for a charitable purposes (property tax) exemption.”  The IBTR had ruled in favor of Housing Partnerships, Inc. in June, 2018.  The IBTR decision stated that “HPI proved that its scattered-site housing was owned and exclusively occupied and used for charitable purposes” and ordered that “HPI be granted an exemption for those parcels for each year under appeal.”  Bartholomew County had appealed that decision to the tax court.

“We are grateful for the Court’s decision, and pleased to have final resolution on this issue,” said Mark Lindenlaub, HPI’s executive director.  “The cost of the county’s decision to deny that our affordable rental housing program qualifies for property tax exemption has been enormous.  We have incurred over $200,000 in legal fees, plus interest on the money we’ve had to borrow, to prove we qualify for property tax exemption.  That money, plus hundreds of hours of staff effort, could have been much better invested in our community to help families access safe, decent affordable housing.”

After being granted property tax exemption in 2002 and 2004 by the county assessor’s office, HPI relied on the property tax exemption decisions to set budgets and invest in new affordable rental housing in Bartholomew County.  The county reversed its determination in 2006, and HPI was forced to pay unbudgeted property taxes and fees during the lengthy appeal process.  Unable to raise rents because of its long-term funding commitments, HPI was forced to borrow money and sell several properties to keep the agency afloat.

The court’s decision means that the county will have to refund HPI the taxes it collected, plus interest.  Lindenlaub said the money will be used to pay off the loans the agency took out during its legal fight.

For more on this story, see Thursday’s Republic.