Frequently Asked Questions
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How does one figure their property taxes?
- Assessed value and taxable value are not synonymous terms.
- Property is assessed as of January First.
- Property reassessed every two years.
- Taxes are levied on a value determined by the auditor by applying a “roll back” percentage to the assessed value and deducting any applicable exemptions or credits. The “roll back” percentages vary each year.
|$100,000||2002 Assessed value (residential class)|
|x0.513874||roll back percentage (2002)
(last year roll back 0.516676)
|=51,387||roll back value (taxable)|
|x0.03238763||levy $32.38763 per thousand
(varies with taxing district)
|-$157.08||homestead tax credit ($4,850 x 0.03238763)|
(rounded to nearest even whole dollar)
How does the assessor estimate market value?
The assessor generally uses three approaches to estimate the market value of your property.
The first approach is to find the 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 is usually considered the most important in determining the value of a 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 the replacement value. Value of the land then would be added to arrive at a total estimate of the 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 effect the final estimate of value.
What is a homestead tax credit?
Any property owner in the State of Iowa who lives in the property can receive a homestead tax credit. To be eligible, a homeowner must occupy the homestead any six months out of the year but must reside there on July 1. This exemption is a reduction of the taxable value of their property amounting to a maximum $4,850 or the amount which does not allow the taxable value to be less than zero Disabled veterans that acquired property under the provisions of the United States Code, Title38, Chapter 21, Sections 801 and 802 are allowed to claim a homestead credit that would be equal to the entire amount of taxes levied on the homestead property. The exemption is not allowed if the combined income of the veteran and their spouse, if any, exceeds $25,000 in the prior income tax year. Income means taxable income for federal income tax purposes plus income from any political subdivision exempt from federal income tax. See Code of Iowa.
What is a Military Exemption?
Any property owner who has been involved in full-time active duty during a war or conflict has been honorably discharged and lives in Iowa qualifies for a military exemption. The applicable times of either a war or conflict are spelled out in Section 427.3 of the Code of Iowa. Though the wars date back to 1846, the ones generally in use now are for World War I through the Viet Nam conflict. The amount of the exemption in taxable value for the most often used exemptions is $2,778 for WWI and $1,852 for any others after that. It is the responsibility of each person who qualifies for and wishes to receive a military exemption, to make application with the city or county assessor and also have their discharge papers (DD214) recorded in the appropriate county. Application is to be made prior to July 1 of the claim year. National guardsmen and reserves are not eligible for the exemption is their only active duty was for training purposes. On some rare occasions, there were guardsmen and reserves that were called into active duty other than training. In these cases, the person is eligible for the exemption. See Code of Iowa Chapter 426A.
- World War I
- April 6, 1917 to November 11, 1918
- Army of Occupation in Germany
- November 12, 1918 to July 11, 1923
- American Expeditionary Forces in Siberia
- November 12, 1918 to April 30, 1920
- Second Haitian Suppression of Insurrections
- 1919 – 1920
- Second Nicaraguan Campaign w/ the Navy or Marines in Nicaragua
- August 27, 1926 to January 2, 1933
- Yangtze Service w/ Navy & Marines in Shanghai or in Yangtze Valley
- 1926 – 1927 and 1930 – 1932
- Marines/Several Warships Ordered to Nicaragua
- January 6, 1927 (withdrawn 1933)
- Navy & Marine Operations in China
- August 11, 1937 to July 1939
- World War II
- December 7, 1941 to December 31, 1946
- Women’s Air Corp. during WWII
- December 7, 1941 to December 31, 1946
- Korean Conflict
- June 25, 1950 to January 31, 1955
- Vietnam Conflict
- February 28, 1961 to May 7, 1975
- Dates changed in 1999
- August 24, 1982 to July 31, 1984
- December 20, 1989 to January 31, 1990
- Persian Gulf War
- August 2, 1990 to Present
- Anyone who served in the National Guard or Reserves for 20 years after January 28, 1973, and is now retired/discharged, now qualifies for an exemption
All wartime exemption amounts are $1,852 with the exception of World War I with a $2,778 exemption amount.
To get a copy of your DD214 contact the National Personnel Records Center at:
National Personnel Records Center, GSA
(Military Personnel Records)
9700 Page Blvd.
St. Louis, MO 63132
What is Family Farm Credit?
This credit is available to all farm operators who own and operate farm land, or farm land owned by a family member such as parents, children, grandparents, grandchildren, brother, sister, aunt, uncle, niece, nephew. Cousins do not qualify.
Family Farm One-Time Filing
If a claim for the family farm credit is filed by November 1, 2001, or thereafter, and approved, further filing is not required provided the claimant owns the property on July 1 of subsequent years and the designated person actively engaged in farming the property remains the same.
If the ownership changes, the new owner must re-file for the credit and if the “designated person” changes, the owner must re-file for the credit.
The owner must notify the assessor in writing of a change in the “designated person”. Failure to do so will result in a penalty.
Contact the Assessor’s Office for more information on the complexities of this law. See Code of Iowa Chapter 425A
What is market value?
Residential, commercial and industrial real property is assessed at 100% market value. Market value of a property is an estimate of the price that it would sell for on the open market on the first day of January of the year of assessment. This is often referred to as the “arms length transaction” or “willing buyer/willing seller” concept. The assessor must determine the fair market value of real property. To do this, the assessor generally uses three approaches to value.
The first approach is to find properties that are comparable to the subject property and that have recently sold. Local conditions peculiar to the subject property are then considered. In order to adjust for local conditions, the assessor also uses sales ratio studies to determine the general level of assessment in a community. This method is generally referred to as the "market approach" and is usually considered the most important in determining the value of residential property.
The second approach to value is the "cost approach" which is an estimate of how many dollars at current labor and material prices it would take to replace a property with one similar to it. In the event the improvement is not new, appropriate amounts of depreciation and obsolescence are deducted from replacement value. Value of the land is added to arrive at an estimate of total property value.
The "income approach" is the third method used if the property produces income. If the property is an income producing property, it 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.
Agricultural real property 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.
What qualifies you as the assessor?
Assessors are appointed to their position by a Conference Board consisting of the members of the Board of Supervisors, the Mayors of all cities, and a member from each of the school boards within the jurisdiction.
Assessors are required by law to pass a state examination and complete a continuing education program consisting of 150 hours of formal classroom instruction with 90 hours tested and a passing grade of 70% attained. The latter requirement must be met in order for the assessor to be reappointed to the position every six years.
The Conference Board approves the assessor’s budget and after a public hearing acts on adoption of the same. The assessor is limited, by statute, depending upon the value of the jurisdiction, to a levy limitation for the budget.
Why does my value change?
After properties have been appraised, the values are analyzed to ensure accurate and equitable assessments. Iowa law requires that all real property be reassessed every two years. The current law requires the reassessment to occur in odd numbered years. 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 property assessments.
If you disagree with the assessor’s estimate of value, please consider these two questions:
- What is the actual market value of my property?
- How does the value compare to similar properties in the neighborhood?
If you have any questions about the assessment of your property, please contact my office.