What is Market Value?
Residential, Multiresidential, Commercial and Industrial real property are assessed at 100% market value. Market value of a property is an estimate of the price that it would sell for on the open market on the first day of January of the year of assessment. This is often referred to as the "arms length transaction" or "willing buyer/willing seller" concept. The Assessor must determine the fair market value of real property. To do this, the Assessor generally uses three approaches to value.
Market Approach -
The first approach is to find properties that are comparable to the subject property and that have recently sold. Local conditions peculiar to the subject property are then considered. In order to adjust for local conditions, the Assessor also uses sales ratio studies to determine the general level of assessment in a community. This method is generally referred to as the MARKET APPROACH and is usually considered the most important in determining the value of residential property.
Cost Approach -
The second approach to value is the COST APPROACH, which is an estimate of how many dollars at current labor and material prices it would take to replace a property with one similar to it. In the event the improvement is not new, appropriate amounts of depreciation and obsolescence are deducted from replacement value. Value of the land is added to arrive at an estimate of total property value.
Income Approach -
The INCOME APROACH is the third method used if the property produces income. If the property is an income producing property, it 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 property being appraised since errors or inaccurate information can seriously affect the final estimate of value.
Multiresidential is a new classification for assessment and taxation purposes beginning with the 2015 assessment. The multiresidential classification applies to mobile home parks, manufactured home communities, land-leased communities, assisted living facilities (as defined in section 441.21, subsection 13) and any property intended for human habitation containing 3 or more separate dwelling units (apartment building, etc).
Agricultural real property is assessed at 100% of productivity and net earning capacity value. The Assessor considers the productivity and net earning capacity of the property. Agricultural income as reflected by production, prices, expenses, and various local conditions is taken into account.
Why Values Change
After properties have been appraised, the values are analyzed to ensure accurate and equitable assessments. Iowa 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 property assessments.
January 1 - Effective date of current assessment.
- February 1 - Signup deadline for Forest or Fruit Tree Reservation
- April 2 through April 25 inclusive - Owner may request informal review of their assessment by the Assessor.
- April 2 through April 30 inclusive - Protest of assessment period for filing with the local Board of Review.
- May 1 through Adjournment - Board of Review meets each year.
- July 1 – Signup deadline for Homestead Tax Credit & Military Exemption
- October 9 through October 31 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).
- November 1 – Signup deadline for Family Farm Tax Credit
- 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 Military or Homestead Credit the first time; (2) has purchased a new or used home and is occupying the property as a homestead as of July 1st; or (3) 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:
Disabled Veterans Homestead Credit
River and Stream Banks
Family Farm Credit
Fruit Tree Reservations - 8 years
Industrial Partial 427
Notification and Appeal
If you disagree with the Assessor's estimate of value, please consider these two questions:
- 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, please contact your assessor's office.
More about the Property Assessment Appeal Board
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 district court if they are not satisfied with the Board of Review's decision.