What is Market Value?
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. How does the Assessor Estimate Market Value?
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 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
replacement value. Value of the land then would be added to arrive to the total
estimate of value. The INCOME APPROACH is 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:
1. What is the actual market value of my property?
2. 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. You may file a written
protest with the Board of Review, which is composed of three or five members
from various areas of the assessing jurisdiction. The Board operates
independently of the assessor's office, and has the power to confirm or to
adjust either upward or downward any assessment. If you are not satisfied
with the decision of the Board of Review you may appeal to district court within
twenty days after adjournment of said Board, or twenty days after May 31st
whichever is latest. 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 properties 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:
January 1 - Effective date of current assessment.
April 16 through May 5 inclusive - Protest of assessment period for filing with
the local Board of Review.
May
1 through adjournment - Board of Review meets each year.
October 16 through October 25 inclusive - Protest period for filing with Board
of Review on those properties affected by changes in value as a result of the
Director of Revenue and Finance Equalization Orders (odd numbered years).
January 1 through December 31 - Period for filing for Homestead Credit and
Military Exemption.
-
One time filing is provided, by statute, unless the property
owner is filing for a Military or Homestead Credit for the first time;
-
Has purchased a new or used home and is occupying the
property as a homestead as of July 1st;
-
Owner was using as a homestead but did not previously file.
If the home qualifies and the property owner files on or before
July 1, the exemption will go into effect for the current assessment year. If
the property owner files after July 1, the exemption will go into effect the
year following the sign up. Filing is required on the
following, if provisions have been made for exemptions as required:
| KEY: |
|
√ Annual |
|
+ Permanent |
|
- Other |
| √ |
Recreational Lake |
| √ |
Forest Cover |
| √ |
Impoundment Structures |
| √ |
Native Prairies |
| √ |
Wetlands |
| √ |
Open Prairies |
| √ |
Disabled Veterans Homestead Credit |
| √ |
River and Stream Banks |
| + |
Family Farm Credit |
| + |
Forest Reservations |
| + |
Pollution Control |
| + |
Fruit Tree Reservations - 8 years |
| + |
Wildlife Habitat |
| - |
Urban Revitalization |
| - |
Industrial Partial 427B |
Things to Remember:
Assessed value and taxable value and 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. |
