Dorothy Ann Snowball Family Trust Ada County Appeal No

							                      BEFORE THE IDAHO BOARD OF TAX APPEALS

 IN THE MATTER OF THE APPEAL OF DOROTHY                     )    APPEAL NO. 08-A-2202
 ANN SNOWBALL FAMILY TRUST from the                         )
 decision of the Board of Equalization of Ada County        )    FINAL DECISION
 for tax year 2008.                                         )    AND ORDER

                             RESIDENTIAL PROPERTY APPEAL

       THIS MATTER came on for hearing October 1, 2008 in Boise, Idaho before Hearing

Officer Steven Wallace. The full Board participated in this decision. Trustee Dorothy Ann

Snowball appeared for Appellant Dorothy Ann Snowball Family Trust.         Appraisal Supervisor

Brad Smith and Residential Appraiser Mark Southard appeared for Respondent Ada County.

This appeal is taken from a decision of the Ada County Board of Equalization denying the protest

of the valuation for taxing purposes of property described as Parcel No. R2039251355.

       The issue on appeal is the market value of a residential property.

       The decision of the Ada County Board of Equalization is modified.

                                      FINDINGS OF FACT

       The assessed land value is $115,000, and the improvements' valuation is $179,400,

totaling $294,400. Appellant requests the land value remain $115,000, and the improvements'

value be reduced to $138,900, totaling $253,900.

       The subject property is a .14 acre lot located in East Boise, improved with a 2,184 square

foot duplex built in 1910. Above grade area includes 1,788 square feet. The below grade area

is 396 square feet. At the 2008 assessment date there had been no recent remodeling or

upgrades. The property is in a historic overlay district.

       For several years prior to 2008 this property was used as a triplex. However according

to city standards, the legally permitted use may not exceed two (2) units. Respondent reports

the 2008 assessment considered subject a functional triplex where that was its actual use.

                                               -1-
                                                                           Appeal No. 08-A-2202

Appellant has recently begun the process of converting the property to a functional duplex and

noted subject is in need of substantial upgrading. It was opined subject could only be sold in an

“as is” condition. Pending upgrades to the electrical system alone are expected to cost $5,000.

       Taxpayer found no recent multi-family sales within one mile of subject.             Value

comparisons were made to four (4) “surrounding” properties with reference to assessed values.

       Appellant’s value calculation for subject was ultimately based on a square foot rate

comparison from a recent duplex sale. ($142 per square foot.) The duplex had recently sold,

but the comparison was based on the “assessed value” of the sale property. Substituting the

sale price in place of the assessed value would indicate a rate of $126 per square foot.

Respondent also relied on this property in its value case, the Assessor opining the property was

inferior to subject in multiple instances. In that regard total net appraisal adjustments of plus

$87,517 were made to the $205,000 sale price. Where the property was a duplex, plus $15,000

was included in total adjustments to reflect subject’s adjudged triplex design.

       Both parties offered information that considered the potential rental income from the

subject property. Appellant’s direct capitalization of subject’s 2007 net operating income yielded

a total property value of about $120,000. The Assessor, also using subject’s 2007 income,

presented an effective gross multiplier approach that indicated a price range of $184,000 to

$300,000.

       Respondent primarily relied on a sales comparison approach to value. Four (4) sales

were considered with the appraisal adjustments presented in a grid analysis. Two (2) sales were

duplexes and the others triplexes. The County included the mixed sales to better consider

subject’s legal (duplex) and functional (triplex) uses. Adjusted sale prices indicated a value




                                              -2-
                                                                                     Appeal No. 08-A-2202

range for subject roughly between $292,000 and $305,000, or $139 to $180 per square foot.1

Both duplex sales were adjusted a positive $15,000 to reflect the triplex design unit that was

integral to the County’s assessment. From the analysis, the Assessor’s final estimate for subject

was $300,000.

       Had subject been considered a duplex in the Assessor’s analysis (changing the triplex

design adjustment) the adjusted sale prices would range from about $277,000 to $290,000.

Considering just the duplex sales in this manner would yield a tighter range from $277,000 to

$280,000.

                                       CONCLUSIONS OF LAW

       This Board's goal in its hearings is the acquisition of sufficient, accurate evidence to

support a determination of fair market value or exempt status. This Board, giving full opportunity

for all arguments and having considered all testimony and documentary evidence submitted by

the parties in support of their respective positions, hereby enters the following.

       The ad valorem assessment for the current tax year is to reflect the property status and

its market value as of January 1, 2008. Idaho Code Section 63-205(1). Market value is defined

in Section 63-201, I.C. Both parties were attentive to the assessment date, however they

diverged on whether subject should be assessed as a duplex or a triplex. We hold subject must

be valued in accordance with its legal use which is limited to that of a duplex. Assessment

appraisal must comply with recognized appraisal methods and techniques. Section 63-208(1),

I.C. Also related to the Board’s duplex determination is the requirement that “all property” is

taxable – one can’t possess or transfer a property right in an illegal use – and the specific


          1
            The price per square foot range reflects a Board change to the Assessor’s grid analysis where an
  error was observed on Comp #1's adjusted value per square foot.

                                                    -3-
                                                                            Appeal No. 08-A-2202

standard that property is valued in its fee simple interest. Section 63-203, I.C. and IDAPA

35.01.03.217.

       Recognized appraisal practice, especially in market valuations, values property in its

“highest and best use” which by definition is limited to legally permissible uses. Idaho’s

requirement to give major consideration to a property’s “actual and functional use” would not give

rise to considering subject here in a non permitted triplex use. Section 63-208(1), I.C.

       Appellant’s valuation of subject primarily considered other assessments. Assessed values

are not considered good evidence of market value, nor is this practice a recognized appraisal

approach. The best evidence of subject’s current market value was that offered by the County’s

sales comparison approach. A relatively large number of property differences were present, but

necessary adjustments were considered.         As indicated above, subject was erroneously

considered a triplex for this analysis. Reversing or correcting the associated design adjustment

is relatively straight forward on the information presented. The fact remains that subject was at

least temporarily constructed as a triplex. Some other considerations remain in this regard, but

are not readily considered on the evidence in record. Nor is reopening the record called for.

       With correction, the County’s sales-based valuation of subject indicates about $280,000

(duplex sales) to $285,000 (triplex sales). The Board finds more consideration should be given

the duplex sales where no design adjustment is called for. The decision of the Ada County

Board of Equalization will be modified to reflect a total valuation for subject of $280,000.

                                         FINAL ORDER

       In accordance with the foregoing Final Decision, IT IS ORDERED that the decision of the

Ada County Board of Equalization concerning the subject parcel be, and the same hereby is,

MODIFIED to reflect a decrease to $280,000.

                                               -4-
                                                                     Appeal No. 08-A-2202

      IT IS FURTHER ORDERED that any taxes which have been paid in excess of those

determined to have been due be refunded or applied against other ad valorem taxes due from

Appellant.

      DATED February 27, 2009




                                           -5-