Residential, multi-residential and industrial 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 "arm's length transaction" or "willing buyer/willing seller" concept. The assessor must determine the fair market value of the 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 for depreciation and obsolescence would be deducted from replacement value. Value of the land is added to arrive at an estimate of total property value. Income Approach
The INCOME APPROACH 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.
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 propertied 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.
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.
A written protest may be filed with the Board of Review which is composed of either three or five members from various areas of the county who are familiar with the local market conditions and trends. The Board operates independently of the assessor's office and has the power to confirm or to adjust either upward or downward any assessment. An individual may petition to the Property Assessment Appeal Board if they are not satisfied with the Board of Review's decision. If dissatisfied with a Property Assessment Appeal Board decision, the decision may then be appealed to the district court. As in the past, a property owner may appeal the Board of Review's decision directly with the district court and forego filing with the Property Assessment Appeal Board.