For Property Owners
Your local assessor has forms that you need to complete, sign, and file for the
homestead credit and/or military exemption. That office can also tell you the
qualifications for each. Iowa law provides for a number of exemptions and
credits, including homestead credit and military exemption. It is the property
owner's responsibility to apply for these as provided by law at the Assessor’s
office in their jurisdiction. If the property you were occupying as a homestead is
sold, or if you cease to use the property as a homestead you are required to
report this to the assessor in whose jurisdiction the property is located.
Depending on the classification of the property, the assessment is to represent
the market value of the property unless otherwise provided by Iowa Code.
Residential, agricultural dwellings, commercial, and industrial classed properties
are to be assessed at market value. Changes in market value as indicated by
research, sales ratio studies and analysis of local conditions as well as economic
trends both in and outside the construction industry are used in determining your
assessment. Agricultural land and buildings are valued on productivity and net
earning capacity.
To estimate the market value of your property, the Assessor generally uses three
approaches. The first approach is to find properties that are comparable to yours
which have sold recently. Local conditions peculiar to your property are taken
into consideration. The assessor also uses sales ratio studies to determine the
general level of assessment in a community, in order to adjust for local
conditions. This method is generally referred to as the MARKET APPROACH
and usually considered the most important in determining the value of residential
property. The second approach is the COST APPROACH and is an estimate of
how many dollars at current labor and material prices it would take to replace
your property with one similar to it. In the event improvement is not new,
appropriate amounts for depreciation and obsolescence would be deducted from
replacement value. Value of the land then would be added to arrive at the total
estimate of value. The INCOME APPROACH is the third method used if your
property produces income such as an apartment or office building. In that case,
your property could be valued according to its ability to produce income under
prudent management; in other words, what another investor would give for a
property in order to gain its income. The income approach is the most complex of
the three approaches because of the research, information and analysis
necessary for an accurate estimate of value. This method requires thorough
knowledge of local and national financial conditions, as well as any
developmental trends in the area of the subject property being appraised since
errors or inaccurate information can seriously affect the final estimate of value.
The Iowa Department of Revenue is responsible for “equalizing” assessments
every two years. Following is a general explanation of the purpose of
equalization. The Department compares the assessors' abstracts to a “sales
assessment ratio study” it has completed independently of the assessors. If the
assessment (by property class) is 5 percent or more above or below the sales
ratio study, the Department increases or decreases the assessment. (There is
no sales ratio study for agricultural and industrial property.) Equalization occurs
on an entire class of property, not on individual property. Also, equalization
occurs on an assessing jurisdiction basis, not on a statewide basis. Equalization
is important because it helps maintain equitable assessments among classes of
property and among assessing jurisdictions. This contributes to a more fair
distribution of state aid, such as aid to schools. It also helps to equally distribute
the total tax burden within the area.
The local assessor is appointed by a conference board to a six year term. All
assessors must have successfully passed the
assessor exam given by the
Department of Revenue. Each assessor must successfully complete 150 hours
of formal continuing education in order to be eligible for reappointment.
State law requires all properties to be reassessed every two years. Current law
requires the reassessment to occur in odd numbered years. If necessary,
assessors may reassess property every year.
A notice
will be issued in each jurisdiction receiving an equalization order. The county
auditor shall give notice on or before October 8 by publication in an official
newspaper to
any class of property affected by the equalization order, and the county
auditor will also give notice by mail postmarked on or before October 8 to each
property owner or taxpayer whose valuation has been increased by the
equalization order.
Depending on when the homestead credit application or military exemption
application was signed by the property owner, it may more than 24 months for
the credit or exemption to appear on the property tax statement. July 1 of the
current assessment year is the deadline for filing for the homestead credit or
military exemption for the current assessment year. If the July 1 deadline is
missed, the exemption or credit will not be applicable until the next assessment
year.
As an example, if a property owner applied for the homestead credit on July 2,
2009, they have missed the July 1 deadline for assessment year 2009. The
property owner is now applying for the homestead credit for assessment year
2010. The property owner will not receive a property tax statement for levies
against the 2010 taxable value until Aug or Sept 2011.
Each year, assessed values are subject to a rollback factor determined by the
Director of Revenue creating a taxable value. Property tax is calculated by
applying a levy rate to the taxable value. Levy rates and rollbacks change from
year to year therefore adjusting the amount of property tax.
If you disagree with the assessment of a property, you have two basic options. One option is to have an informal review with the assessor’s office. If an agreement can be reached between April 2 through April 25, a signed document will change the assessment to the mutually agreed to value or classification. The second option is to file a formal appeal with the Board of Review between April 2 and April 30. Appeal forms for the Board of Review may be obtained from the assessor's office and must be returned back to that respective office by the deadline above.
- K-12 Schools
- Counties
- Cities
- Hospitals
- Merged Area Schools
- Assessors
- Townships
- Agricultural Extension District
- Miscellaneous
The homestead credit is a property tax credit for residents of the state of Iowa
who own and occupy their homestead on July 1 and for at least six months of the
calendar year. It is a tax credit funded by the State of Iowa for qualifying
homeowners, and is based on the first $4,850 of actual value of the homestead.
There are a number of different taxing districts in a jurisdiction, each with a
different levy rate. Each year the county auditor determines for that district a levy
rate that will yield enough money to fund the different entities in that district. The
entities include local schools, counties, cities, townships, community colleges,
local assessors, and others. Since more than one taxing authority is calculating
a tax rate for the property, all the rates are added together, resulting in a single
tax levy called a consolidated levy. This consolidated levy is always the result of
two or more tax rates established by different government entities.
Veterans who served in active duty and who were honorably discharged are
eligible to receive a military exemption on their property taxes. If you served in
the military and were on active duty for 18 months you are eligible for a military
exemption. Pursuant to Iowa law, the reduction in taxable value is determined by
the dates and amount of time the veteran served in active duty. The reduction of
taxable value for World War I veterans is $2,778 and $1,852 for all other periods
of service. Former and current members of the Iowa National Guard and reserve
forces need not have performed active duty if they served at least 20 years.
The rollback rate is a statewide rate set annually for each property class by the
Iowa Department of Revenue. More than 20 years ago, residential property
values were rising quickly. To help cushion the impact of high inflation, the
Legislature passed an assessment limitation law called rollback. Increases in
assessed values for residential and agricultural property are subject to this
assessment limitation formula. If the statewide increase in values of homes and
farms exceeds 3 percent due to revaluation, their values are "rolled back" so that
the total increase statewide is 3 percent. Rollback is also available for industrial
and commercial property when necessary. This does not mean that the
assessment on your home will increase by only 3 percent. The rollback is
applied on a class of property, not an individual property. This means that the
statewide total taxable value can increase by only 3 percent due to revaluation.
The Iowa Department of Revenue imposes equalization orders in odd-numbered
years for each property class, except industrial, in each of the 107 assessing
jurisdictions. Equalization is accomplished by increasing or decreasing the
aggregate valuations for certain classes of property within assessing jurisdictions
by the percentage necessary to adjust the level of assessment to actual value.
Real estate parcels are annually assigned a property classification by the
assessor. This classification is to be consistent with the primary use of the
property. There are five main classifications of property in Iowa. These classes are
agricultural, residential, multi-residential, commercial, and industrial. Also, any parcel that has both multi-residential and either a commercial or a industrial classification will be considered to be a "dual classed" property. Classification may not
necessarily be the same as the zoning of the property.
Market value of a property is an estimate of the price that it would sell for on the
open market on January 1st of the year of assessment. This is sometimes
referred to as the 'arms length transaction' or 'willing buyer/willing seller' concept.
Taxable value is the value determined by the county auditor after application of a
rollback factor to the assessed value. Taxable value is calculated by multiplying
the rollback rate for the correct property class by the equalized 100% actual
value.
The local board of review is composed of either three or five members who are
familiar with local market conditions and trends. According to Iowa law, one
member must be a farmer, one a licensed real estate broker, and one a
registered architect or contractor. The board of review reviews all petitions and
has the power to confirm or to adjust upward or downward any assessment. The
Board operates independently of the Assessor's office.
The conference board for the county assessor is comprised of the county
supervisors, the mayors of incorporated towns in the county, and a school board
member from each school district in the county. The conference board for the
city assessor is comprised of the county supervisors, city council members, and
the school board members.
The Property Assessment Appeal Board (PAAB) is a state agency created for the
purpose of establishing a consistent, fair and equitable property assessment
appeal process. Decisions of the local Board of Review may be appealed to
PAAB. One member of the board shall be a certified real estate appraiser or
hold a professional appraisal designation, one member shall be an attorney
practicing in the area of state and local taxation or property tax appraisals, and
one member shall be a professional with experience in the field of accounting or
finance and with experience in state and local taxation matters.
There are several more exemptions that may be applied for at your local
assessor’s office. Each type of exemption has specific criteria and rules. Some
are one time sign up and others must be applied for annually. Please check with
your local assessor to see if you qualify for any of the following:
- Barn & One-Room Schoolhouse
- Data Center Business Property Exemption
- Disabled and Senior Citizens Property Tax Credit/Rent Reimbursement
- Disabled Veterans' Homestead
- Family Farm Credit
- Forest & Fruit Tree Reservations
- Impoundment Structures
- Industrial Property, Research Service Facilities, Warehouses, Distribution
Center and Cattle Facilities
- Low Rent Housing
- Methane Gas Conversion Property
- Mobile Home Reduced Tax Rate
- Manufactured Home Community or Mobile Home Park Storm Shelter
- Native Prairie/Wetland
- Pollution Control and Recycling
- Religious, Literary, and Charitable Societies
- Special Assessment for Elderly and Disabled
- Speculative Shell
- Urban Revitalization
- Web Search Portal
- Wildlife Habitat
- Wind Energy Property
Assessment notices are mailed on or before April 1st whenever there is a change
in assessment to a taxpayer’s property.