Today the Iowa Department of Revenue issued an Assessment Limitations Order, or “rollback,” on property values in Iowa. The Order adjusts the property values used by local governments to compute property taxes for agricultural, residential, commercial, and industrial property. While the Department issues an Assessment Limitations Order each year, this year’s Order is notable in that it implements the first phase of Governor Branstad’s 2013 Commercial Property Tax Reform package, 2013 Iowa Acts Senate File 295. Prior to the 2013 legislation, state law allowed no more than a four percent increase from year to year in the taxable values for agricultural, residential, commercial, and industrial property classifications. Effective with the 2013 Assessment Limitations Order, the increase in taxable values for the agricultural and residential property classifications is limited to three percent. Additionally, the 2013 law removed the assessment limitation for commercial, industrial, and railroad properties and replaced it with a five percent reduction in the taxable value, from 100 percent to 95 percent. In 2014, the taxable value will be reduced another five percent, from 95 percent to 90 percent.
The 2013 Order sets forth the following taxable values:
The taxable value for residential property is 54.4002% of the assessed value. This is an increase from the 2012 level of 52.8166 %. Residential property includes farm dwellings.
The taxable value for agricultural property is 43.3997% of the assessed value. This is a decrease from the 2012 level of 59.9334%.
The taxable value for commercial, industrial and railroad properties is 95% of the assessed value. This is a decrease from the 2012 level of 100%.
No adjustment was ordered for utility property because its assessed value did not increase enough to qualify for reduction. Utility property is limited to an 8% annual growth.
County auditors will apply the adjustments to each property classification to compute the taxable values used to establish property taxes. Tax liabilities based on the 2013 taxable values are payable in fiscal year 2014-15 and will not be determined until local taxing bodies establish their property tax needs early next year.