New limitations order increases taxable valuation of residential property
By BROOKS TAYLOR
Mt. Pleasant News
DES MOINES — Even if property tax levies from governmental bodies decrease next year, residential property owners may see an increase in their tax bill.
That’s because the taxable value has been increased for residential property by the Iowa Department of Revenue.
Last week, the department issued its assessment limitations order, commonly referred to as the “rollback.” Residential property in Iowa during the last tax year was taxed at 52.8166 of its assessed value. During the next property tax cycle (property taxes payable in 2014-15), residential property will be taxed at 54.4002 percent of its assessed value. Residential property includes farm dwellings.
Meanwhile, the taxable value of agricultural property (farmland) will decrease from 59.9334 percent to 43.3997 percent.
The taxable value for commercial, industrial and railroad properties is 95 percent of the assessed value, a decrease from 100 percent.
No adjustment was ordered for utility property because its assessed value did not increase enough to qualify for reduction. Utility property is limited to 8 percent annual growth.
This year implements the first phase of Gov. Terry Branstad’s 2013 Commercial Property Tax Reform (Senate file 295). Prior to the 2013 legislation, state law allowed no more than a 4-percent increase from year to year in the taxable values for agricultural, residential, commercial and industrial property classifications.
Effective with legislation passed this spring by the Iowa Legislature, the increase in taxable values for the agricultural and residential property classifications is limited to 3 percent.
Additionally the law removed the assessment limitation for commercial, industrial and railroad properties and replaced it with a 5 percent reduction in taxable value, from 100 to 95 percent. In 2014, the taxable value will be reduced another 5 percent, from 95 to 90 percent.
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 (September 2014 and March 2015 deadlines) and will not be determined until local taxing bodies establish their property tax levies early next year.
Additional information about the property tax rollback is available on the Department of Revenue’s website at www.state.ia.us/tax/locgov/propequalroll.html.