Real Estate
/ 2Answers to common questions about real estate, including descriptions, class, taxing, and much more.
What is a Levy Authority?
What is an administrative real estate description?
Does the assessor set the value for all real estate property?
Do railroads and utility companies pay real estate taxes?
What does it mean that 100% Actual Value is “equalized”?
What is an “ag dwelling”, and why do I get a separate tax bill for it?
What offices at the county are involved in the assessment and taxation of real estate?
How can I change the address where my tax bill is mailed?
What are the real estate responsibilities of the county auditor?
How is Taxable Value calculated?
How is the Homestead Credit calculated?
What is a real estate Military Exemption?
How is the Military Exemption calculated?
How do I apply or find out if I qualify for the Homestead Credit or Military Exemption?
What is a Levy Authority?
A Levy Authority is a governmental entity with statutory authority to levy property taxes. These entities include counties, cities, school districts, townships, community colleges, local assessors, and others.
What is a legal description?
A legal description is a description of real estate that is used in legal documents such as abstracts, deeds, mortgages, etc.
What is an administrative real estate description?
An administrative real estate description is a description of real estate used by county offices for real estate assessment and taxation administrative purposes. Typically, it will be similar to a legal description, but may contain abbreviations or other summaries.
What is a property class?
Real estate parcels are annually assigned a property class by the assessor or the Iowa Department of Revenue. Property classes include Agricultural, Residential, Commercial, Industrial, Railroad, Utility, and Gas & Electric Utility.
Does the assessor set the value for all real estate property?
No. Property owned by railroads and utility companies is valued by the Iowa Department of Revenue and certified for taxation to the county auditor.
Do railroads and utility companies pay real estate taxes?
Yes, except that utilities defined as gas & electric utilities pay excise taxes. Railroad and utility values are included in the tax base for the respective Levy Authorities, and both real estate and excise taxes are paid to those Levy Authorities.
Where do my taxes go?
Your taxes are apportioned by the county treasurer to Levy Authorities such as the school district, city or township, and county in which your real estate parcel is located. If your property is in a Tax Increment Financing (TIF) Area, most of your taxes are probably apportioned to a TIF Authority, such as a city. You can see the distribution of your taxes on your tax bill.
What is Taxable Value?
Taxable Value is the value used to calculate taxes and on which the tax askings of the various Levy Authorities are based.
What does it mean that 100% Actual Value is “equalized”?
The Iowa Department of Revenue imposes equalization orders in odd-numbered years against each property class for each local assessor. Sometimes called “the assessor’s report card”, the equalization order is used to increase or decrease 100% Actual Values when those values are not sufficiently accurate.
How does the Iowa Department of Revenue know when an assessor’s 100% Actual Values are not sufficiently accurate?
The Department receives a copy of the Declaration of Value required to be filed with the county recorder when real estate is sold. Actual sales values are then compared to the assessor’s 100% Actual Values.
What is an “ag dwelling”, and why do I get a separate tax bill for it?
An ag dwelling is a residence that sits on land classified as agricultural, such as a house on a 40-acre tract of farmland. Iowa law requires the value of the house to be taxed as residential property, while the value of the farmland is taxed as agricultural property. For certain tax administrative purposes, many counties create a separate tax parcel for an ag dwelling. In the case of an ag dwelling within city limits, this allows the county to apply the regular (full) city tax rate to the ag dwelling and the city ag (lower) tax rate to the land.
What offices at the county are involved in the assessment and taxation of real estate?
The assessor, county auditor, and county treasurer are part of the tax cycle in that, in general, each has various administrative responsibilities for a given assessment year. In addition, the county recorder records various real estate documents, including subdivision plats, mortgages, surveys, and conveyances such as deeds, etc.
How can I change the address where my tax bill is mailed?
The procedure for changing the mailing addresses for tax bills will vary from county to county. Contact your county treasurer to determine what you need to do.
What are the real estate responsibilities of the county auditor?
While practices vary between counties, in general the county auditor has the following statutory responsibilities:
- Apply Equalization Rates by property class and assessor jurisdiction to calculate equalized 100% Actual Values in odd-numbered years
- Apply annual Rollback Rates by property class to calculate Taxable Values
- Enter state-certified values for utilities and railroads for taxation
- Administer Tax Districts and TIF Tax Districts such that taxpayers pay the correct amounts and governmental authorities receive the correct amounts
- Calculate and certify base value and increment value in TIF Tax Districts
- Certify Taxable Values to cities, schools, townships, and other governmental bodies for use in preparing annual budgets
- Review and certify the budgets of cities, schools, townships, and other governmental bodies for compliance with tax rate limits
- Certify annual Consolidated Tax Levy Rates by Tax District
- Calculate and certify taxes to the county treasurer for collection
- Calculate and certify drainage assessments to the county treasurer for collection
- Maintain the official county plat books and transfer books, and enter ownership name changes for taxation and assessment
- Certify amounts Military Exemption, Homestead Credit, Ag Land Credit, and Family Farm Credit to the state
What is the Rollback Rate?
The Rollback Rate is an annual statewide rate set annually for each property class by the Iowa Department of Revenue. In effect, the rate of growth in value for a given property class may be limited by the rate of growth in value of another property class. Somewhat similar to two people tied together in a three-legged race, neither property class can get too far ahead of the other one.
How is Taxable Value calculated?
Taxable Value for most property is calculated by multiplying the Rollback Rate for the correct property class by the equalized 100% Actual Value. Taxable Value for gas & electric utility property is calculated by the Iowa Department of Revenue. One exception is agricultural land within an incorporated city. City ag land is subject to a different Tax Levy Rate limit than other Property classes within a city, and ag land parcels are assigned to a separate city ag Tax District. The result is that the various ag parcels within a city ag Tax District do not have to be geographically contiguous.
What is a Tax District?
Generally, a Tax District is a geographically contiguous area defined by boundaries of schools, townships, and cities when overlaid with one another. As such, it is a contiguous area within which the Tax Levy Rates are the same for all parcels.
What is a Homestead Credit?
The Homestead Credit is a tax credit funded by the State of Iowa for qualifying homeowners, and is generally based on the first $4,850 of Net Taxable Value. In the case of a Disabled Veteran Tax Credit, the value of the Homestead Credit is increased to the entire amount of the Taxable Value of the property.
How is the Homestead Credit calculated?
The Homestead Credit is calculated by dividing the homestead credit value by 1,000 and multiplying by the Consolidated Tax Levy Rate. That amount may then be reduced by the county to the same amount at which the State of Iowa has approved funding.
What is a real estate Military Exemption?
Veterans who served in active duty during certain periods of time and who were honorably discharged are eligible to receive a Military Exemption on their property taxes. Pursuant to Iowa law, the Military Exemption value is determined by the dates the veteran served in active duty. Values for most veterans are $1,852, or $3,704 in the case of a husband and wife who both qualify. The value for World War I veterans is $2,778.
How is the Military Exemption calculated?
The Military Exemption value is subtracted from the Taxable Value of a property prior to the calculation of taxes. To know how much your tax bill was reduced by the Military Exemption, divide the value by 1,000 and multiply the remainder by the Consolidated Tax Levy Rate.
How do I apply or find out if I qualify for the Homestead Credit or Military Exemption?
The assessor has forms that you need to complete, sign, and file for the Homestead Credit and/or Military Exemption. That office can also tell you the qualifications for each.
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Last Updated on Tuesday, 07 June 2011 10:12
