Section 50IAC27-5-6. Review of neighborhood delineations

   (a) The assessing official shall review existing neighborhood delineations to determine if the delineations used adequately placed like property into homogeneous geographic groups. The assessing official may only modify neighborhood boundaries if their neighborhood review identifies inadequacies in the original delineations. This modification may include the development of new neighborhood delineations. If the assessing official determines through review, ratio studies, or appeals from previous assessment years that the neighborhood delineations need to be modified, the local assessing official shall proceed in setting new neighborhood boundaries.

  (b) The assessing official shall base new neighborhood delineations on geographic areas sharing locational and physical similarities, and stratified groups exhibiting a high degree of similarity in the following:

(1) Amenities.

(2) Use.

(3) Economic trends.

(4) Building characteristics, such as the following:

(A) Improvement quality.

(B) Age.

(C) Physical characteristics.

  (c) In areas where values are erratic or neighborhood delineations are not sufficiently homogeneous, the real property in the area shall be reassessed or further stratified by property characteristics, developing separate factors for various property strata. For example, if older homes in a specific neighborhood are appreciating or depreciating at a more rapid rate than new homes, the two (2) groups should be stratified and analyzed separately with a factor determined for each property type within the specific neighborhood.

  (d) It is not sufficient to merely stratify properties and sales according to their classification, that is, residential and commercial, and develop one (1) neighborhood and one (1) annual adjustment factor for the entire class of property. Properties throughout any area within the county, even though they have the same classification, may vary considerably in quality, style, age, location, and amenities and, therefore, may change in value at differing rates. Sales used to develop annual adjustment factors must be comparable to the properties for which the factors are being developed. In other words, the assessor shall endeavor to ensure that adjustment factors are developed from a sample of sales that is representative to the population of parcels to which the factors will ultimately be applied.

  (e) The assessing official may also determine that it is inappropriate to apply an annual adjustment factor on both the land and improvements of a property. For example, the assessing official may determine to apply the annual adjustment factor:

(1) only to the land; or

(2) to the dwelling and one (1) outbuilding or garage and not on other outbuildings, recent additions, or other improvements.

In that case, the assessing official shall document the reasons for application of the annual adjustment factor to some, but not all, of the improvements or land. (Department of Local Government Finance; 50 IAC 27-5-6; filed Apr 8, 2010, 1:45 p.m.: 20100505-IR-050090502FRA)