Market value of a property is an estimate of the price that it would sell for on the open market on January first of the year of assessment. This is sometimes referred to as the "arms length transaction" or "willing buyer/willing seller" concept.
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 APPROACHand 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 to the total estimate of value.
The INCOME APPROACHis the third method used if your property produces income such as an apartment of 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 properly being appraised since errors or inaccurate information can seriously affect the final estimate of value.
Why Values Change?
State 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 your assessment.
If you disagree with the assessor's estimate of value, please consider these two questions before proceeding, as outlined below:
What is the actual market value of my property? How does the value compare to the similar properties in the neighborhood? If you have any questions about the assessment of your property, feel free to come in and discuss it with the assessor.
A written protest may be filed with the Board of Review which is composed of either three members or five members from various areas of the county who are familiar with local market conditions and trends.
The Board operates independently of the Assessor's office and has the power to confirm or to adjust upward or downward any assessment. An individual may petition to the Property Assessment Appeal Board if they are not satisfied with the Board of Review's decision
If dissatisfied with a Property Assessment Appeal Board decision, the decision may then be appealed to the district court. As in the past, a property owner may appeal the Board of Review's decision directly with the district court and forego filing with the Property Assessment Appeal Board.
Tax Levies and Assessed Values
There are a number of different taxing districts in a jurisdiction, each with a different levy.
Each year the County Auditor determines for that district a levy that will yield enough money to pay for schools, police and fire protection, road maintenance and other services budgeted for in that area. The tax levy is applied to each $1,000 of a property taxable value.
The value determined by the assessor is the assessed value and is the value indicated on the assessment roll.
The taxable value is the value determined by the auditor after application of state ordered "rollback" percentages for the various classes of property, with other properties always compare with the value on the assessment roll of the assessor's property record cards and not the value indicated on the tax statement.
Exemptions and Credits
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.
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.
Dates to Remember
Dates to Remember
January 1 - Effective date of current assessment
April 2-25 - Property owners may request an informal review of their assessment
April 2-30 - Period for filing assessment protests with local Board of Review
May 1- Adjournment -Board or Review meets
October 9-31 -Protest period to file with Board of Review for properties affected by changes in value as a result of a
Department of Revenue Equalization Order
Filing is required on the following, if provisions have been made for exemptions as required
- Recreational Lake - Annual
- Forest Cover - Annual
- Impoundment Structures - Annual
- Native Prairies - Annual
- Wetlands - Annual
- Open Prairies - Annual
- Disabled Veterans Homestead Credit - Annual
- River and Stream Banks - Annual
* Family Farm Credit - Permanent
* Forest Reservations - Permanent
* Pollution Control - Permanent
* Fruit Tree Reservations - 8 years - Permanent
* Wildlife Habitat - Permanent
+ Urban Revitalization - Others
+ Industrial Partial 427 B - Others
Things to Remember
Assessed value and taxable value are not synonymous terms.
Property is assessed as of January First. Property is 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.
On values determined as of January First, one does not stand to pay taxes until eighteen months later.
The "roll back" is the percentage of actual value that is determined by the Director of Revenue and Finance each year on the several classes of property where the total value increase STATEWIDE exceeds four percent for each class of property.
The percentage so determined by the Director of Revenue and Finance are certified to and applied by the local county auditor to all property in each class effected throughout the State. Percentages determined by the Director of Revenues and Finance are the same for all the assessing jurisdictions in the State.
Increases in assessed value of individual parcels of property, as determined by the assessor, may exceed four percent within a jurisdiction.
Agricultural property, except agricultural dwellings, are assessed on the basis of productivity and net earning capacity using a five year crop average and capitalized at the rate set by the Legislature. The rate is currently seven percent.
Tentative and final equalization orders are issued by the Director of Revenue and Finance in odd numbered years on or about August 15th, and October 1st respectively.
The orders are sent to the various county auditors who apply them to the classes of property affected, if any. Assessors and members of the Board of Review are appointed to their terms of office. Assessors, in addition to completing the required 150 hours of Continuing Education, must be approved by a majority vote of the Conference Board in order to be reappointed.
If you desire further information, questions concerning PROPERTY VALUES or other information relating thereto should be addressed to the assessor's office in the respective jurisdiction and not the Board of Supervisors or Treasurer.
The assessors of Iowa hope that the information contained herein will be of value to the property owner and has clarified some of these problems and issues relating to assessment and the applicable laws.