Gallatin County tax board sets five unbuildable Harvest Creek lots at 35% of base value after appeal

At a hearing before the Gallatin County Tax Appeal Board, members agreed to set the assessed value of five Harvest Creek subdivision lots at 35% of the department's base rate, increasing the nonbuildable reduction to 65% for the parcels in question. The decision follows testimony from the taxpayer's appraiser and presentations by the Montana Department of Revenue.

Taxpayer representative Matt Dalton, a certified real-estate appraiser, told the board the five lots are effectively unbuildable under recorded deed covenants and that the department's 46% "nonbuildable" adjustment understates the loss of utility. "We don't think we can find any evidence that a knowledgeable buyer'd per the definition of market value'd would pay" the department's result, Dalton said, arguing for a 95% negative influence adjustment that would reduce the lots to roughly 5% of the base rate.

The Department of Revenue, represented by Tom Riley and lead appraiser Mandy McClure, told the board the agency derived its 46% influence from actual sales data in a nine-county region (including Madison, Jefferson and Park counties) because comparable constrained sales are scarce in Gallatin County. "We are restricted to using influences that are derived from actual sales," McClure said, adding that the department's model used the best available sales to compute the nonbuildable adjustment.

Board members pressed both sides on key facts. The record shows the five lots were part of a 2013 transfer recorded at $150,000 for all five (about $30,000 each), but the taxpayer's counsel said that transfer was an internal allocation between related companies and not an arms-length market sale. Dalton emphasized that the lots must remain available for emergency vehicle access under the covenants and therefore provide little practical utility to owners until road easements or other changes occur.

The department acknowledged the restrictions may be temporary if road construction (the record refers to a proposed connection to Fowler) eventually removes the encumbrances; staff also said the department will update assessments when recorded changes occur. McClure told the board the department already monitors recorded documents and will revise valuations in subsequent cycles if covenants are lifted.

During deliberation board members described the dispute as a tension between using empirical sales-based influences and recognizing the particular lack of present utility for these parcels. The board discussed a range of alternative adjustments before settling on a compromise: apply a 65% reduction from the base rate (i.e., value at 35% of the base). The chair gave an example calculation noting that at the 35% valuation the valuation for one example parcel would be $91,249.90 under the board's agreed percentage.

The board said it will issue a written decision reflecting the revised percentage; the parties were reminded that either side may appeal the county board decision to the Montana Tax Appeal Board within 30 days of receipt. The written decision will include exact dollar-valuations for each of the five subject parcels and the procedural information for filing an appeal.

Why it matters: The board's compromise affects the current tax liability for the five subject parcels and establishes a locally determined approach to applying a nonbuildable influence when comparables are sparse. The decision also illustrates how deed-recorded restrictions and future roadway plans can materially affect assessed values and tax burdens.

Next steps: The board will circulate a written decision with itemized valuations and appeal instructions; the taxpayer or the department may appeal to the Montana Tax Appeal Board within the 30-day statutory window.