Departments | City Assessor | Frequently Asked Questions
The Iowa property tax is primarily a tax on "real property", which is mostly land, buildings, structures, and other improvements that are constructed on or in the land, attached to the land, or placed upon a foundation. Typical improvements include a building, house or mobile home, fences, and paving.
The following five classes of real property are evaluated:
Home owners pay less than half of the property tax collected each year in Iowa. Farmers pay 21 percent, and businesses and industry, a total of 23 percent. Utility companies, including railroads, pay 10 percent.
An assessor's primary duty is to assess all real property, which includes residential, commercial, industrial and agricultural. The Iowa Department of Revenue and Finance assesses public utilities and railroads. County and city assessors are not employees of the State or of the Iowa Department of Revenue and Finance.
County assessors are appointed by a conference board composed of the county board of supervisors, the mayors of all incorporated cities, and a board member from each school district who lives in the assessor's jurisdiction.
City assessors are appointed by a conference board composed of the county board of supervisors, members of the city council, and all members of the school board.
Assessors are appointed to six-year terms. To be eligible, they must have a high school diploma or GED and pass an examination administered by the Iowa Department of Revenue and Finance. To be reappointed, they must successfully complete a continuing education program equal to 150 hours of classroom instruction during their six-year terms.
Residential, commercial and industrial real estate is assessed at 100% of market value.
The assessor must determine the fair market value of the property. To do this, the assessor generally uses three approaches:
Agricultural real estate is assessed at 100% of productivity and net earning capacity value.
The assessor considers the productivity and net earning capacity of the property. Agricultural income as reflected by production, prices, expenses, and various local conditions is taken into account.
The Iowa Department of Revenue and Finance assists local governments in making property tax assessments fair and in compliance with the law. It does not collect or use property taxes.
Property tax supports many different "taxing authorities". Cities, counties, school districts, and townships are the most common. Taxing authorities may also include community college districts, agricultural extension districts, assessor offices, hospital districts and sanitation districts. In addition, there are associations for fire protection, drainage, and other public needs that levy taxes.
Iowa has more than 2,000 taxing authorities. Most property is taxed by more than one taxing authority.
The Iowa Department of Revenue 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 an 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.
Twenty 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 4 percent due to revaluation, their values are "rolled back" so that the total increase statewide is 4 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 4 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 4 percent due to revaluation.
Basically, three variables must interact to decrease or increase your property taxes:
Your taxes increase if...
Your taxes decrease if...
Why might you pay higher taxes than your neighbor?
The value of a house depends on land size, square footage, type of construction, age, quality, location, story height, and condition, but that's not all. Your neighbor's property may be taxed by different taxing districts than you are. For instance, districts are often divided by highways. If our neighbor's property is across the highway, it may be taxed by different districts than you are.
Also, credits and exemptions such as Homestead, Ag Land, and Military could make a difference.
Property owners who disagree with the assessor's estimate of the market value of their property should ask themselves, "Could I sell this property for that amount today?" If the answer is yes, then the value is probably correct. However, every property owner has the right to appeal an assessment.
Property owners may appeal their initial assessments to the local board of review by filing a written protest between April 16 and May 5 of each year. This board meets annually in May to consider the protests.
In a reassessment year a property owner may protest an assessment for one or more of the following reasons:
A property owner may appeal the protest to district court if not satisfied with the board of review's decision. Contact your assessor's office for more information.
The Homestead Credit is available to residential property owners. The credit is an actual reduction in the amount of property tax owed; it is not a refund.
To qualify for the credit, the property owner must be a resident of Iowa and actually live on the property on July 1 and for at least six months of every year. The only exceptions are persons in the military and nursing homes who otherwise quality.
Sign-up for the credit is at the assessor's office by July 1 of the year the credit is first claimed. Once a person qualifies, the credit continues until the property is sold or until the owner no longer qualifies.
Military veterans who served on active duty during wartime periods qualify for this exemption. The veteran must apply with the local assessor; once accepted, the exemption is ongoing.
The Agricultural Land Tax Credit was originally established in 1939 to help offset higher farm taxes. The credit is available to all owners of agricultural land of 10 acres or more if the use is for agricultural or horticultural purposes. Land owners do not actually file a claim. The county auditor determines the amount of the credit for each taxpayer.
Legislation was enacted in 1990 for the Family Farm Tax Credit. The purpose was to give an additional property tax credit to those individual land owners who were actively engaged in farming the land. An application is required to be filed with the local assessor.
Land used for agricultural or horticultural purposes in tracts of 10 contiguous acres or more qualify for this credit. Buildings and other structures do not.
