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The Indiana Supreme Court overturned a state tax court decision on Tuesday, in a case that examined the constitutionality of Indiana’s one-acre limit on a homeowner’s property tax liability.
The high court ruled in favor of the Lake County Assessor, finding Crown Point residents Tulsi and Kamini Sawlani failed to prove that the state’s Homestead Statute is unconstitutional, as applied to their case, and could not show they use more than one acre of their property as curtilage.
The decision reversed a 2024 Indiana Tax Court ruling, which found that “the Constitution does not permit a fixed one-acre limitation on the amount of land eligible for the one percent tax cap.”
In drawing from the plain meaning of “curtilage,” and the application of curtilage in tax-assessment and Fourth Amendment claims, the Sawlanis argued that a curtilage has “no fixed size limit.”
But the court did not decide whether a size limit is impermissible because, wrote Justice Christopher Goff in the opinion, the Sawlanis failed to show that they use more than one acre as curtilage.
“The Taxpayers say they desire privacy, but there is no fence on the property, the trees do not form a distinguishable boundary around the lot, and the Taxpayers presented no evidence to the Board (Indiana Board of Tax Review) that they use the entire plot in such a way that it should be treated as the home itself,” Goff wrote.
Even when applying the United States v. Dunn (1987) four-factor test—which is used to determine whether an area is curtilage—the court concluded that the Sawlanis failed to meet their burden of proving the Homestead Statute’s one-acre limit is unconstitutional as applied to them.
“Even if Article 10, Section 1 does not permit limiting curtilage to one acre, Taxpayers failed to prove they use more than one acre of their property as curtilage, so we express no view on the merits of Taxpayers’ constitutional claim,” Goff wrote.
According to court documents, the Sawlanis own a two-story home situated on 3.981 acres of land in a gated community in Crown Point. Their property is not fenced in, and although they have trees for privacy, the trees do not create a distinguishing boundary around the lot.
For a 2019 tax assessment, the Lake County Assessor classified one acre as the “homestead” and applied a standard deduction, taxing one acre of their property at 1% of its gross assessed value.
The Lake County Assessor classified the other 2.981 acres of the Sawlanis property as non-residential property, applying a 3% tax on it.
The Sawlanis xhallenged that assessment, arguing that a one-acre size limit under Indiana’s Homestead Statute violates the state constitution’s 1% tax cap.
The Indiana Tax Code defines a “homestead” as the dwelling and real estate, “not exceeding one acre,” immediately surrounding a dwelling.
The Sawlanis argued that their curtilage exceeds one acre, so the code’s one-acre size limit on the homestead is unconstitutional as applied to them.
The high court remanded the case with instructions for the tax court to affirm the tax review board’s determination in favor of the assessor.
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