Court Opinion

ID: 6768623
Source: CourtListenerOpinion
Date Created: 2022-07-21 00:40:36.322082+00
Date Added: 2024-06-11T16:02:42.664531
License: Public Domain

Pfeifer, J.,
concurring. Given the facts of this case, I concur in this court’s judgment. However, our decision today should not be accorded great value as precedent since it is based on an unrealistic method of determining this property’s value for tax purposes.
The best way to determine value of property is through appraisal. In this case, one of the parties did submit an appraisal which the BTA correctly rejected as unpersuasive. That appraisal was based on estimates, surveys, and other unverified information rather than on actual information which could have been secured from the property owner. The submitted documents could not even be considered a “windshield appraisal.”
The BTA faced the added problem in this case of property which was not yet completely developed at the time of the tax lien date. That fact makes an appraisal especially difficult. Since the project was not yet completed and rented at the time of the tax lien date, income could not be used as a method to determine value. The school board overzealously sought an increased assessment based upon the value of the completed property for a time period before the property was completed.
The difficulty associated with a mid-construction appraisal is the main reason that I concur with the majority opinion in this case. The circumstances of this case have forced this court to allow a determination of value based upon the purchase price of the property. While use of the purchase price was unfortunately necessary in this case, it is generally overused and overrated as an accurate measure of fair market value.
Purchase price is especially not useful in cases where the cost of assembling the parcels of property may bear no resemblance to the actual value of the property. The developers of a multiparcel tract may pay substantially more than a particular part is worth to complete the set. Once assembled, the new property may become very unique in nature and therefore take on a value that bears no resemblance to the original purchase price. Additionally, a person who falls in *578love with a unique property and overpays should not be doubly punished by having the purchase price determine the value for taxation.
Blind reliance on purchase price to determine fair market value of real estate is simplistic and naive. It is also, however, grounded in statute and in the common law. Beginning with the troubling decision in State ex rel. Park Invest. Co. v. Bd. of Tax Appeals (1964), 175 Ohio St. 410, 412, 25 O.O.2d 432, 434, 195 N.E.2d 908, 910, where this court stated that purchase price is the “best method of determining value,” and continuing through the amendment of R.C. 5713.03 by Am.Sub. H.B. No. 290, 136 Ohio Laws, Part II, 3182, 3247, to declare that the price of an arm’s-length sale shall be the true value, the usefulness of purchase price for tax purposes has been overrated. In Ratner v. Stark Cty. Bd. of Revision (1986), 23 Ohio St.3d 59, 23 OBR 192, 491 N.E.2d 680, this court began to turn the corner when it held that there is only a presumption that the sale price is the true value, and that the presumption may be rebutted.
In my view, purchase price should be regarded only as “some evidence of value” for real estate tax purposes and should not be presumed to equate with ■ fair market value. In the event that there is no other reliable evidence regarding value, then purchase price may be used to gauge market value. Unfortunately, other credible evidence was lacking in this case, so purchase price is indeed the best evidence' available. I therefore concur.