Iowa

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State of Iowa Property Taxes


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State Tax Summary
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Real property tax is called property tax in the state of Iowa . The state of Iowa has ninety-nine counties, with the county treasurer as the ex-officio collector in all counties. Iowa has eight cities with their own assessors and any city may elect its own assessor, when the population is over 10,000. County Assessors maintain and set property valuations . The County Auditor certifies property valuations . The County Treasurer collects current and delinquent property tax . The Iowa Department of Revenue may assist local governments for compliance with the law and to ensure property tax assessments are fair . It does not collect or use property taxes.

Property taxes are determined by the final tax rate as a result of budgets established to provide services, an assessor’s assessment, a county auditor’s calculations, and laws administered by the Iowa Department of Revenue (http://www.state.ia.us/tax ). Property assessment in Iowa is a series of events that takes 18 months from start to finish (http://www.state.ia.us/tax/ ). The Iowa property tax is a tax on land, buildings, structures, and other improvements attached to the land, or placed upon a foundation. Typical improvements may be a building, house or mobile home, fences, and paving . The state of Iowa has personal exemptions for veterans, homeowners, disabled, seniors, low income, and economic improvement. Property owners have three levels of protest: Iowa Board of Review, District Court of the County and State Supreme Court. The state agency is Iowa Department of Revenue and Finance, 100 Hoover State Office Building, Des Moines, Iowa 50319; (515) 281-3204, FAX (515) 242-6040, E-mail PropertyTaxInfo@dlgf.io.gov A state issued assessor’s manual, Iowa Real Property Appraisal Manual and Duties and Responsibilities of Iowa Assessors, is available for $13.36 (http://www.state.ia.us/tax from Iowa Department of Revenue and Finance, 100 Hoover State Office Building, Des Moines, Iowa 50319; (515) 281-4780 The Chicago ASC (Area Service Center) provides tax service for Iowa.

Assessment dates and rates

  • Assessment date: January 1
  • Fiscal year: January 1 through December 31

Taxes are collected one year in arrears. For ex, 2007 taxes are due in 2008.

  • Reassessment cycle: Two years

Contents

  • Classification of property: All assessed at 100%
    • Residential (homeowners pay 47 percent of taxes collected)
    • Agricultural (farmers pay 16 percent of taxes collected)
    • Commercial and Industrial (businesses and industry pays 34 percent of taxes collected)
    • Utilities/railroad [assessed at the state level and pays 3 percent of taxes collected)
  • Level of government responsible for assessment: Township
  • Economic Loss Dates: One billing; Two installments: first due September 1 and second due March 1 of following year
  • Tax Collector and Officials: The county treasurer is the ex-officio collector in all counties. County Assessors maintain and set property valuations. The County Auditor certifies property valuations. The County Treasurer collects current and delinquent property tax.

Personal Exemptions

Iowa offers total exemptions and partial exemptions to the property tax. It is the property owner’s (or renter’s) responsibility to apply for these with the local assessor .

  • Agricultural land
  • Art galleries
  • Cattle facility
  • Cemeteries
  • Disabled veterans homestead
  • Educational institutions
  • Family farm credit
  • Forest cover
  • Forest reservations
  • Fruit tree reservations
  • Governments: state, cities, counties, townships
  • Grain handlers
  • Historic property rehabilitation
  • Homestead credit
  • Housing (nonprofit) for senior citizens; Indian housing authority property
  • Impoundment structures
  • Industrial partial (427B)
  • Industrial machinery and equipment and computers first assessed in Iowa for 1995 and thereafter
  • Libraries/literary societies
  • Low-income tax credit for elderly, disabled
  • Low-income rent reimbursement for elderly, disabled
  • Low-rent housing
  • Methane gas conversion
  • Military exemption and armories
  • Mobile home reduced rate for low income
  • Native prairies
  • Open prairies
  • Personal property
  • Pollution control and recycling
  • Public grounds
  • Recreational lakes
  • Religious, charitable, benevolent associations
  • Rivers and streams
  • River and stream banks
  • Special assessments for elderly, disabled, low income
  • Speculative shell buildings
  • Urban revitalization
  • War veterans associations and Veteran’s property
  • Wetlands and Water reservoirs and ponds
  • Wildlife habitats
  • Wind energy conversion
  • Homestead Credit

The Homestead Credit is for residential property owners. This credit is a reduction, not a refund, in the amount of property tax owed. The property owner must be a resident of Iowa, live on the property on July 1 and live on the property for at least six months of every year. Persons in the military and nursing homes, who otherwise qualify, are the only exceptions.

  • Military Exemption

Any veteran who served on active duty during wartime periods qualifies. The veteran applies one time with the local assessor. The exemption is ongoing.

  • Agriculture Land Credit

The Agricultural Land Tax Credit, established in 1939, helps offset farm taxes. The credit is available to all owners of 10 acres or more if the land is used for agricultural or horticultural. The county auditor determines the credit amount and land owners do not file a claim.

  • Family Farm Credit

In 1990 legislation was enacted to provide $10 million for the Family Farm Tax Credit. This additional property tax credit is for individual land owners actively engaged in farming the land. One signing is required unless ownership changes. Buildings and other structures do not qualify, but land used for horticultural or agricultural in tracts of 10 contiguous acres or more qualify for this credit..

Forms

Specific deduction claim forms are available from the county auditor or on the Iowa Department of Local Government Finance website http://www.io.gov/icpr/webfile/formsdiv/dlgf.html .

Forms due dates

Applications for deductions against real property must be filed during the twelve months before June 11 to be effective for taxes payable in the following year. The filing deadline for deduction applications for mobile homes and manufactured homes that are not assessed as real property is the twelve months before March 31, unless noted below. All deductions for real property require that the ownership must be recorded as of March 1 of the assessment year for taxes payable the following year. Manufactured and mobile homes must be owned by January 15 to be eligible for the deductions to be applied to the tax bill for that year.

How property tax determined

Residential property in Iowa is assessed at 100% of market value and the assessor determines the fair market value. The assessor can use three methods:

  • Cost Approach: at current labor and material prices, estimate how much it would take to replace the property with one similar to it. Use this method when there are no sales of comparable properties.
  • Income Approach: for an apartment or office building, estimate how much income the property can produce.
  • Market Approach: using other comparable properties that have sold recently, determine the most probable sales price of the subject property.

How to prepare and Appeal and File

  • Valuation Notices : Reassessments are completed by March 1 of the immediate following year.
  • Appeal Procedure or Levels:

Any property owner or aggrieved taxpayer has three levels of protest. The first is to file a written protest with the county Board of Review between April 16 and May 5 of the assessment year . Next, the State Board of Tax Review may review orders, decisions or directives issued by the Director; a written notice must be given to the Department within 60 days of the order, decision or directive from which the appeal is taken.

  • Appeal Calendar: 30 days from date of mailing of notice

Personal property tax

  • Classification of property: Personal Property YES
  • Assessment rate: Unknown

Commercial property tax

Commercial real estate is assessed at 100% of market value

  • Agricultural property tax

Agricultural real estate is assessed at 100% of market value Agricultural real estate is assessed at net earning capacity value and 100% of productivity. The assessor establishes agricultural income using prices,expenses, production and local conditions.

Additional tax bills and charges

  • Corrected bill When an error is found on the original tax statement or when property owners go before the Board of Review, resulting in tax increases or decreases, a correct bill is issued when the correctins are made.
  • TIF - Tax Increment Financing (TIF) taxes can be assessed by the county board for specific purposes as deemed necessary. Some counties combine TIF taxes with the tax bill; other counties have a separate billing.
  • Penalty and Interest charges: 10% for each installment missed.
  • Delinquent taxes: Delinquent balances are applied to subsequent bills. Iowa sends delinquency notices when property taxes are delinquent .
  • Construction Work in Progress: No provisions .
  • Iowa Counties:

The U.S. state of Iowa is divided into ninety-two counties http://en.wikipedia.org/wiki/List_of_counties_in_Iowa

Current Legislation and Pending Issues

Equalization

The Iowa Department of Revenue is responsible for "equalizing" assessments every two years. The department compares their abstracts to an independent study called a "sales assessment ratio study" (ref online). If the assessment is greater than 5 percent above or below the sales ratio study, the department increases or decreases the assessment. There is no sales ratio study for agricultural and industrial propert (ref online). Equalization occurs on a class of property, not on an individual property, and occurs on a jurisdiction basis, not statewide.==

Rollbacks

The Iowa legislature passed an assessment limits law in 1987 called “rollbacks” when residential property values were rising quickly, due to high inflation. Increases in assessed values for residential and agricultural property are subject to a rollback formula. If statewide increases in f home and farm values exceeds 4 percent, their values can be "rolled back" so the total increase statewide is 4 percent. Rollback may be available for industrial and commercial property.

References





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