How do you get recognized as a land developer in Indiana to receive the developers discount on vacant commercial land?

Question

I have a client who purchased a vacant commercial lot in Lake County with the intent to hold it until it's ready to be developed. He bought the parcel from a known developer where it had been receiving the "developers discount" for over 10 years. After the transfer of ownership, the assessor raised to assessed value from $3500 to $872,000 which increased to tax liability from $89 to over $20,000. We've appealed that assessment, but the assessor is refusing to reinstate the developers discount and their reason is because the new owner is not a developer. So, how do you get recognized as a developer. The DLGF was not helpful, and the code is very vague (IC 6-1.1-4-12). I've been trying to find relevant case law from IBTR findings, but to no avail yet. Please help?

James L. Arrasmith · Answer

To be recognized as a developer and qualify for the developer’s discount in Indiana, you need to demonstrate that you are engaged in the business of land development. The Indiana Code (IC 6-1.1-4-12) does not provide a clear-cut definition, but case law and assessor practices suggest that ownership history, intent, and business activities matter. If your client purchased the property from a known developer and plans to hold it for future development, they may need to take additional steps to establish themselves as a developer in the eyes of the assessor.   
 
One approach is to form a legal entity, such as an LLC, that focuses on real estate development and document any actions that indicate intent to develop, like site planning, working with engineers, or seeking zoning approvals. If they already own other properties for development, that history could help support their claim. Submitting a business plan or evidence of past projects to the assessor’s office could strengthen the argument that they meet the requirements for the discount.   
 
Since assessors have discretion, it may be necessary to appeal further, either to the Indiana Board of Tax Review (IBTR) or even the courts if needed. Researching past IBTR decisions may help identify successful arguments made by other property owners in similar situations. If the assessor remains unwilling to recognize your client as a developer, pushing for a more detailed explanation in writing can be useful for future appeals.

Q: How do you get recognized as a land developer in Indiana to receive the developers discount on vacant commercial land?