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.
For example: “Lot One (1) in Frank’s Subdivision, Mason City, Iowa”.
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. For example: “L 1 Frank’s Sub”.
What is a Property Class?
Real estate parcels are annually assigned a property class by the local assessor or the Iowa Department of Revenue. Property classes include Agricultural, Residential, Commercial, Industrial, Railroad, Utility, and Gas & Electric Utility.
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.
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 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.
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, Clinton, Dubuque, Iowa City, Cedar Rapids, Davenport, and Sioux City
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
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. Find a link to the specific county website that has this information.
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, TIF Tax Districts, and SSMID 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
Tax Credits and Exemptions
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.
What is a Homestead Exemption?
On May 4, 2023, Governor Reynolds signedHouse File 718, establishing a homestead tax exemption for claimants 65 years of age or older.
In addition to the homestead tax credit, eligible claimants who own the home they live in and are 65 years of age or older on or before January 1 of the assessment year are now eligible for a homestead tax exemption. For the assessment year beginning on January 1, 2023, the exemption is for $3,250 of taxable value. For assessment years beginning on or after January 1, 2024, the exemption is for $6,500 of taxable value. An exemption is a reduction in the taxable value of the property rather than a direct reduction in the amount of property tax you pay.
Please stop into the Assessor's Office, Clay County Administration Building, 300 W 4th St, Spencer to apply for this new exemption if you were 65 on or before January 1, 2023 and live in the home. For questions, you may call the office at 712-262-1986. The exemption will be applied to the property tax for the 2024/25 taxes. The filing deadline is July 1st, 2023. Any applications received after that date will be valid for the 2024 assessment year. The exemption is a one-time application with the exemption being in effect as long as the property owner is eligible.
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.
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?
Your local 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.
Understanding a SSMID District
What is a SSMID District?
A “self-supported municipal improvement district” is informally referred to as a SSMID District. Generally, it is an area of contiguous property within a city – often in the downtown area – either zoned for commercial or industrial purposes or a duly designated historic district.
How does a SSMID District work?
A tax levy is imposed on property within the SSMID District in addition to all other tax levies. The added revenues can be used for improvements to the District, administrative fees, and debt for the cost of improvements.
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.
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 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.
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.
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.
What happens when a SSMID District overlaps a TIF Area?
The SSMID District acts as the other regular Levy Authorities in the TIF Area, 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 Area, as well as the amount of TIF debt.
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.
Understanding TIF Areas & TIF Taxing Districts
What is a TIF Area?
A tax increment financing area (TIF Area) is usually created by a city or county for use as an economic development tool. A community college can also create a TIF Area for a new jobs training program.
What is the difference between a TIF Area and a TIF Tax District?
A TIF Area is defined in the ordinance adopted by the city or county. A TIF Area may need to be broken into multiple TIF Tax Districts because of different Consolidated Tax Levy Rates or due to an amendment to the TIF Area, such as happens in an annexation.
How is a TIF Area created?
A city or county must adopt an urban renewal plan and then an ordinance for the division of TIF taxes. The process prescribes public notice and public hearing requirements.
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.
What happens to the “base” taxes and the “increment” taxes?
Taxes levied on the base value are distributed by the county treasurer to the Levy Authorities in the same manner as regular (non-TIF) Tax Districts. Taxes levied on the increment value are paid to the TIF Authority.
Who is the “TIF Authority”?
The TIF Authority is the governmental body that created the TIF Area. Usually a city, it could also be a county, a community college, or a rural improvement zone.
How much of my taxes go to the city (or county) for debt for the TIF Area?
The amount of increment taxes depends on the relative proportion of base value to increment value in the TIF Area, and also on whether or not the TIF Authority requests all of the available TIF increment taxes in a given year. You can see the distribution of your taxes on your tax bill.
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.
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 Consolidated Tax Levy Rate. 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.
What qualifies to be paid from taxes on the increment value?
TIF tax revenues are used to repay debt incurred for qualifying urban renewal projects within a TIF Area. Projects are for the purposes and activities listed in Code of Iowa Sections 403.6 or 403.12 and should also be included in city’s urban renewal plan. TIF debt for an urban renewal project can take the form of rebate agreements, internal loans, general obligation bonds, or TIF revenue bonds.
Understanding Rollback Rates
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. Understanding Tax Districts
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.
How is Taxable Value calculated?
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.