Deduction for Residences in Inventory This Act enables builders to reduce property taxes for a limited time on a limited number of new single family residences, townhouses, or condominiums they build but haven’t sold or rented. Submitted as: Indiana House Enrolled Act No. 1046 Status: Enacted into law in 2011. Suggested State Legislation (Title, enacting clause, etc.) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34
Section 1. [Short Title.] This Act shall be cited as “An Act to Create a Deduction for Residences in Inventory.” Section 2. [Definitions.] As used in this Act: (a) “Affiliated group” means any combination of the following: (1) An affiliated group within the meaning provided in Section 1504 of the Internal Revenue Code, except that the ownership percentage in Section 1504(a)(2) of the Internal Revenue Code shall be determined using [fifty percent (50%) instead of eighty percent (80%)] or a relationship described in Section 267(b)(11) of the Internal Revenue Code. (2) [Two (2)] or more partnerships as defined in [insert citation], including limited liability companies and limited liability partnerships, that have the same degree of mutual ownership as an affiliated group described in subdivision (1), as determined under the rules adopted by the [department of local government finance]. (b) “Residence in Inventory” means real property that is not a model residence as defined in [insert citation] and consists of any of the following that has never been occupied: a single family residence, a single family townhouse, or a single family condominium unit. The term does not include any of the land on which the residence, townhouse, or condominium unit is located or real property that is used by the owner as the owner’s regular office space. However, this subsection does not prohibit the use of a garage or other space in the real property to store or display material used to promote the real property or other similar properties or as a space for meetings with prospective buyers or lessees. (c) “Residential builder” means a person who builds single family residences, single family townhouses, or single family condominium units, for sale in the ordinary course of the person’s trade or business. Section 3. [Applicability.] This Act applies to a residence in inventory that is first assessed as a partially completed structure or a fully completed structure as of [insert date] or thereafter. Section 4. [Deductions for Residences in Inventory.] (a) A residential builder who is the owner of a residence in inventory is entitled to a deduction from the assessed value of the residence in inventory in the amount of [fifty percent (50%)] of the assessed value of the residence in inventory for the following: (1) Not more than [one (1)] assessment date for which the residence in inventory is assessed as a partially completed structure. 24
The Council of State Governments
