Are my taxes higher because my property is in a TIF Area?
To answer this question, it is useful to assume a situation in which two real estate parcels are exactly the same in the following respects: each has the same valuation, Property Class, tax credits & exemptions, and each is in the same Tax Area. The only difference between the two is that one is in a TIF Area and the other is not. The result is that both properties will pay exactly the same amount of taxes. The difference in a TIF Area is not how much you pay in taxes, but who receives the taxes.
Are the taxes on all properties within a SSMID District affected?
Industrial and commercial properties pay the additional SSMID tax. Residential properties pay the SSMID tax only if they are in a duly designated historic district.
Can the property owners within a proposed SSMID District oppose its establishment?
Yes, if 25% of property owners with 25% of the value within the proposed SSMID District file written objections, a unanimous vote of the council is required. If 40% of the property owners with 40% of the value object, establishment of the District is abandoned.
Dates to Remember
• January 1 - Effective date of current assessment.• April 16 thru May 5 inclusive - Protest of assessment period for filing with the local Board of Review.• May 1 thru adjournment - Board of Review meets each year.• July 1 - Filing deadline for new Homestead Credit and Military Exemption applications. Owners must own and occupy their property on or before July of the year for which the credit is claimed.• July 1 through October 15 - File applications for Family Farm Credit.• October 16 thru 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).
Do all of the taxes on the increment value go to pay TIF debt?
No. Debt levies for counties, schools, and cities are applied against both base and increment value, as are physical plant and equipment levies for school districts.
Do railroads and utility companies pay real estate taxes?
No. Property owned by railroads and utility companies is valued by the Iowa Department of Revenue and certified for taxation to the county auditor.
Does the local 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.
General Information About the Assessor
Assessors are appointed to their position by a Conference Board consisting of the members of the Board of Supervisors, the Mayors of all incorporated cities and a member from each school district within the jurisdiction. A city with a population of ten thousand or more may elect to have their own assessor. Assessors are required, by statute, to pass a state examination and complete a Continuing Education Program consisting of 150 hours of formal classroom instruction with 90 hours tested and a passing grade of 70% attained. The latter requirement must be met in order for the assessor to be reappointed to the position every six years. The Deputy Assessor also must pass a state examination as well as successfully complete 90 hours of classroom instruction of which at least 60 hours are tested. The Conference Board approves the assessor's budget and after a public hearing acts on adoption of same. The assessor is limited, by statute, depending upon the value of the jurisdiction, to a levy limitation for his budget.
General Misconceptions About the Assessor's Work.
The Assessor DOES NOT: The Assessor is concerned with value, not taxes. Taxing jurisdictions such as schools, cities and townships, adopt budgets after public hearings. This determines the tax levy, which is the rate of taxation required to raise the money budgeted. The taxes you pay are proportionate to the value of your property compared to the total value of the taxing district in which your property is located.
How can I see a plat map or an aerial photo of my property?
Some counties have their parcel maps and aerial photographs available on the Internet. Click Here to find a link to the specific county website that has this information. Dave - on the page that comes up if no link is available, there will need to be a message such as, “You will need to visit the office of your county auditor or local assessor. Here is the address.”
How can I see a plat map or an aerial photo of my property?
Some counties have their parcel maps and aerial photographs available on the Internet. Click Here to find a link to the specific county website that has this information. Dave - on the page that comes up if no link is available, there will need to be a message such as, “You will need to visit the office of your county auditor or local assessor. Here is the address.”
How do taxes in a TIF Area work?
Taxes in a TIF Area are split between the “base” and the “increment” values. Base value is generally described as the existing value before the TIF Area was created. Increment value is generally described as the growth in value after the TIF Area was created.
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 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 developmental trends in the area of the subject property being appraised since errors or inaccurate information can seriously effect the final estimate of value.
How does the Iowa Department of Revenue know when a local 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 local assessor’s 100% Actual Values.
How does the SSMID tax levy affect other taxpayers and Levy Authorities?
Only property owners within the SSMID District pay the additional tax levy. The District neither positively nor negatively impacts other Levy Authorities.
How is a SSMID District amended or dissolved?
Procedures for amending a SSMID District are generally similar to those for creating one. A District can be dissolved by a rescission of the ordinance by the city council. However, dissolution would not necessarily eliminate a levy for any outstanding debt for the District.
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.
How much is the SSMID tax levy rate?
The SSMID tax levy rate is determined as part of the petition and ordinance process. The law sets no minimum or maximum rates.
How much of my taxes go to the city (or county) for debt for the TIF District?
The amount of increment taxes depends on the relative proportion of base value to increment value in the TIF Area, and also on the amount of TIF debt paid by the TIF Authority in a given year. You can see the distribution of your taxes on your tax bill.
I just purchased this property and I am now being told that I am responsible for the full years taxes, how can this be?
In a typical real estate transaction, taxes are prorated and the buyer is given credit for the seller's portion. You should look at your settlement statement provided to you at the closing to confirm this or contact the realtor or attorney who handled the transaction for you. Real estate taxes are always a year behind. For instance: the taxes due in September cover the time period from July 1 - December 31st of the previous year.
I thought my mortgage company paid my taxes?
Original tax statements are sent to the titleholder of record. If your mortgage company is responsible for paying your property taxes, they will request a statement. You may retain the tax statement mailed to you for your records.
Is “local assessor” the same as county assessor?
Usually, unless your property is in one of the following cities in Iowa that have chosen to have a separate city assessor: Mason City, Ames.
Is the tax levy rate the same for all properties within the SSMID District?
Yes, unless the city ordinance creating the SSMID District divides it into two or more zones, or if another special Levy Authority overlapped part of the SSMID District.
Other Credits and Exemptions
Filing is required on the following, if provisions have been made for exemptions as required: Annual• Fruit Tree Reservations• Impoundment Structures• Native Prairies• Open Prairies• Forest Cover• River and Stream Banks• Recreational Lake• Disabled Veterans' Homestead Credit Permanent• Family Farm Credit• Homestead Credit• Military Exemption• Forest Preserve• Pollution Control• Wildlife Habitat Other• Wetlands• Urban Revitalization• Industrial Partial 427B
PROPERTY ASSESSMENT - Things to remember
1. Assessed value and taxable value are not synonymous terms. 2. Property is assessed as of January First. 3. Property is reassessed every two years. 4. 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 1st, one does not start 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 is 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 Revenue 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 a 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.
Understand Your Property Tax Statement
In an effort to keep the public informed, a great deal of comparative information for the current and prior year is included on each statement. The information will assist property owners in tracking changes in the tax billing from year to year and to help property owners understand where their tax dollars go. For example, the statement will compare key data elements for the current and prior year, such as: 1. The assessed value of the parcel for land, dwellings, and buildings. 2. The taxable value of the parcel for land, dwellings, and buildings. 3. The name of all taxing authorities receiving a tax distribution, the amount of the distribution, and the percentage distribution for each taxing authority. 4. The levy rate for one thousand dollars of taxable valuation multiplied by the taxable valuation to produce the gross taxes. 5. Tax credits which are deducted from the gross taxes in order to produce the net taxes. 6. The amount of property tax dollars reduced on each parcel as a result of the moneys received from the state property tax relief fund. 7. The total amount of taxes for each taxing authority and the difference between the current and prior years expressed as a percentage increase or decrease.
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: 1. Apply Equalization Rates by property class and assessor jurisdiction to calculate equalized 100% Actual Values in odd-numbered years 2. Apply annual Rollback Rates by property class to calculate Taxable Values 3. Enter state-certified values for utilities and railroads for taxation 4. Administer Tax Districts, TIF Districts, and SSMID Districts such that taxpayers pay the correct amounts and governmental authorities receive the correct amounts 5. Calculate and certify Base Value and Increment Value in TIF Districts 6. Certify Taxable Values to cities, schools, townships, and other governmental bodies for use in preparing annual budgets 7. Review and certify the budgets of cities, schools, townships, and other governmental bodies for compliance with tax rate limits 8. Certify annual Consolidated Tax Levy Rates by Tax District 9. Calculate and certify taxes to the county treasurer for collection 10. Calculate and certify drainage assessments to the county treasurer for collection 11. Maintain the official county plat books and transfer books, and enter ownership name changes for taxation and assessment 12. Certify amounts Military Exemption, Homestead Credit, Ag Land Credit, and Family Farm Credit to the state
What expenses qualify to be paid from taxes on the increment value?
Generally referred to as “TIF debt”, such qualifying expenses can include general obligation bonds and rebate agreements. (Mike Albers, I need a little help here.)
What happens if my taxes are not paid by the due date?
On the first day of each month, late interest at the rate of 1.5% (rounded to the nearest dollar, with a $1.00 minimum per parcel) will be added to the unpaid balance of your property taxes. If your taxes remain unpaid, they could be subject to tax sale. If sold at tax sale and if the tax lien is not redeemed within the time specified by Iowa law, the tax sale certificate holder may initiate foreclosure proceedings.
What happens to the “base” taxes and the “increment taxes”?
Taxes for the base value are distributed by the county treasurer to the normal Levy Authorities in the same manner as regular (non-TIF) Tax Districts. Taxes for the increment value are generally paid to the city or county that created the TIF Area.
What happens when a SSMID District overlaps a TIF district?
The SSMID District acts as the other regular Levy Authorities in the TIF District, in that the TIF takes part of the SSMID tax revenues. The amount depends on the proportion of the Base and Increment Values in the TIF District, as well as the amount of TIF debt.
What is the difference between a TIF Area and a TIF District?
A TIF Area is that area defined in the ordinance adopted by the city or county. A TIF Area may have multiple TIF Districts due areas with different Consolidated Tax Levy Rates or areas that were subsequently annexed. Also, a city may extend a TIF Area up to two miles outside the city limits, creating a need for a separate TIF District for the affected part of the unincorporated township.
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.
What should I do if I receive a tax statement on a home I recently sold?
1. Forward the tax statement to the new owners or 2. Return the tax statement to your county treasurer or 3. Notify your County Treasurer.
When are my taxes due?
Your tax statement will provide you with two payment stubs, one for the first half and one for the second half. You may choose to pay the full year at once or pay each half by the due date. The first half of property tax is due by September 1st of each year. Late interest will accrue starting October 1st, unless the last day falls on a Saturday or Sunday, then taxes become delinquent the second business day of October. The second half of property tax is due by March 1st of each year. Late interest will accrue starting April 1st unless the last day falls on a Saturday or Sunday, then taxes become delinquent the second business day of April.
When is a Tax District not geographically contiguous?
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. Another exception is the way that that some residential properties are administered in a SSMID District.
Where do my taxes go?
Generally, 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. However, if your property is in a TIF District, part of your taxes may be paid to the TIF Authority, such as a city. You can see the distribution of your taxes on your tax bill.
Who decides on construction of improvements in the SSMID District?
A petition initiates the process. The signature requirements and approval steps are similar to that of establishing a SSMID District.
Why Value Changes?
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 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 the latest.
