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Monday, November 01, 2004

Indiana Law - Holy Cross Village locked in tax dispute: St. Joseph County denies bid for exempt status, citing income

The South Bend Tribune has a very long and really interesting story today on the issue of whether/when real estate owned by a religious institution is subject to the state property tax. Some quotes:

SOUTH BEND -- Long ago, the brothers of Holy Cross knew they were sitting on a lucrative piece of property.

They had 38 acres of vacant property just north of Holy Cross College worth millions of dollars.

Challenged by retirements in the ranks, rising health care costs and increasing demand for their services, the brothers looked for a way to cash in and support retired brothers and the religious order's overall mission.

The answer became Holy Cross Village at Notre Dame: a tidy, peaceful subdivision of villas, duplexes, four-plexes and apartments that would be doted on by the brothers.

Focusing on senior citizens and retirees, the village is similar to other developments at colleges and universities around the nation.

Better yet, the property was tax-exempt. So the dwellings should be tax-free, too, the brothers surmised.

They were apparently wrong.

Last year, the St. Joseph County Property Tax Assessment Board of Appeals denied the brothers' request for a tax exemption for the village, saying the development is "income-producing."

The brothers received a $52,000 property tax bill last year. They may see a similar or even larger tax bill this year.

County officials questioned whether the brothers' development truly fell under the "charitable or educational" category they checked off on their tax-exemption application. * * *

The issue now sits before the Indiana Board of Tax Review, and it could be a precedent-setting case. No hearing date has been set.

Attorneys for the brothers argue the village is tax-exempt because it's listed in the 2002 official Catholic directory, and because of two recent court decisions that defend the tax-exempt status of such dwellings.

One of the cases overturned the denial of a tax exemption by the same St. Joseph County appeals board. * * *

Posted by Marcia Oddi on November 1, 2004 04:35 PM
Posted to Indiana Law