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Dr. Tulsi and Kamini Sawlani own a two-story residence situated on nearly four acres of land in Lake County, Indiana.  For the 2019 tax year, the Lake County Assessor assigned their property an assessed value of $1,998,900 ($369,600 for land and $1,629,300 for improvements).  In arriving at this value, the Assessor designated the two-story residence and one acre of land as a residential homesite.  The Assessor classified the remaining 2.981 acres as residential excess acreage.  Accordingly, in computing the Sawlanis’ property tax liability, a 1% tax cap credit was applied to the gross assessed value of their homestead property (i.e., the residential homesite) and a 3% tax cap credit was applied to the gross assessed value of their nonresidential property (i.e., the residential excess acreage).

In 2020, the Sawlanis sought review first with the Lake County Property Tax Assessment Board of Appeals and then with the Indiana Board of Tax Review.  During the Indiana Board proceeding, the parties disputed the constitutionality of the statutes that limited the application of the 1% tax cap to one acre of the Sawlanis land.  In October of 2021, the Indiana Board issued a final determination upholding the application of the 1% tax cap to the Sawlanis’ homestead property and the 3% tax cap to their nonresidential property. 

On appeal, the Sawlanis assert that the Indiana Board erred because the statutes that limit the application of the 1% tax cap to just one acre of their land conflicts with Article 10, Section 1(f) of the Indiana Constitution that provides a 1% cap on tangible property, including curtilage, that is used as a principal of residence.

 

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