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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 is 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 building(s) with similar one(s). In the event the building(s) is
not new appropriate amounts for depreciation and obsolescence would be deducted
from replacement value. Value of the land would then be added to arrive at the
total estimate of value.
The INCOME APPROACH is the third method used if your
property produces income such as an apartment or 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 market trends in the area
of the property 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 the
following two questions before proceeding.
What is the actual market value of my property?
How does the value compare to similar properties in the neighborhood?
If you have any questions about the assessment of your property feel free to
come in and discuss them 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 any assessment or to adjust it either upward or downward.
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 each district a levy
that will yield enough money to pay for schools, police and fire protection,
road maintenance and other services budgeted for that area. The tax levy is
applied to each $1,000 of a property's 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.
When comparing the assessment of different properties always compare the value
on the assessment roll or the assessor's property record cards and not the value
indicated on the tax statement.
Tax Credits & Exemptions
Iowa law provides for a number of exemptions and credits, including Homestead
Credit and Military Exemption and provides that it is the property owner's
responsibility to apply for these. 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 - Dates for filing a petition/protest with the
local Board of Review.
May 1 through adjournment - Board of Review meets each year.
October 16 through October 25 inclusive - Period for filing a petition/protest
with Board of Review on properties having changes in value as a result of
Equalization Orders issued by the Director of Revenue & Finance (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 (1) filing for a Military or Homestead Credit the first time; (2) has
purchased a different home and is occupying the property as a homestead as of
July 1st: or (3) owner is using as a homestead but has not previously filed.
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 |
| - |
Impoundment Structures |
| - |
Native Prairies |
| - |
Disabled Veterans Homestead Credit |
| - |
Wetlands |
| * |
Family Farm Credit |
| * |
Wildlife
Habitat |
| * |
Forest Reservations |
| * |
Fruit Tree Reservations - 8 years |
| * |
Pollution Control |
| + |
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 pay taxes until eighteen
months later. The "roll back" is the percentage of actual value to be levied
upon and is determined by the Director of Revenue and Finance each year on each
class of property where the total value increase STATEWIDE exceeds four percent.
The percentage so determined by the Director of Revenue and Finance is certified
to and applied by the local county auditor to all property in each affected
class.
Percentages determined by the Director of Revenues and Finance are the
same for all assessing jurisdictions in the State.
Increases in assessed value of individual parcels of property as determined by
the assessor may exceed four percent. Agricultural property, except agricultural
dwellings, is 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. 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 questions and issues relating
to assessment and the applicable laws.
This information was initially prepared by the Public Relations Committee of the
Iowa State Association of Assessors, and edited by the Mills County Assessor. |
