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:
 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 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:
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 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.
*This information was prepared by the Public Relations Committee of the Iowa
State Association of Assessors. |
