Properties that are classified as residential, commercial, and industrial are to be assessed at 100% of the current market.  Iowa assessors are required to develop the assessments through the use of a cost manual supplied by the Iowa Department of Revenue.  Once the replacement cost new is obtained, depreciation for age and condition is applied, then any adjustment needed to reflect the current market is given.  This value is added to the land and the result is to be reflective of the current market value.

The assessments for agricultural property (land and buildings) is not done at market value.  It is determined using a productivity and net earning capacity formula which considers a five year, rolling average of costs, yields and commodity prices.  This is done every odd year on a county-by-county basis.

Iowa Code requires assessors to “reassess” properties every two (odd) years.  This doesn’t mean they have to be looked at individually, but a review is done of all the sales, by classification, to determine the overall level of assessment versus current market value.  If the overall level is outside the 95% - 105% parameters, the assessor can make adjustments to bring the level within compliance.  If not, the Iowa Department of Revenue will issue “equalization” orders to bring the assessments to the 100% level.

Not necessarily, the assessment is only part of the calculation to determine property taxes.  Two other factors are involved, a “rollback” and the levies established by the local taxing bodies.   The rollback for commercial and industrial properties is statutorily set at 90%, meaning you pay taxes on 90% of your assessment.  The statewide taxable valuation for agricultural and residential properties is only allowed to increase by 3% annually.  If statewide valuations increase by more, then the rollback is adjusted to bring it down.  The levy, or tax rate, is determined by the budgets of the local taxing bodies (i.e. cities, county, schools)  Conceivably, if budgets remained the same, the tax rates would decrease and property taxes would not change.

Taxpayers have the right to appeal their property assessment. There are two options that can be taken, every April 2-25 you can make an informal review request.  In this case the assessor’s office will do the review and inform you of their decision.  The other option is to file a formal appeal.  This can be done April 2-30 and a separate entity, the Board of Review, will take a look at the information.

There are many credits/exemptions available for various types of properties.  The main ones are the homestead credit, military veterans’ exemption, family farm tax credit and the business property tax credit.  Inquire at the assessor’s office about possible eligibility for these.