A substantial increase in Union County’s agricultural land and building valuation may cause an increase in property taxes for the fall of 2014, but statewide regulations will minimize the impact.
The Iowa Department of Revenue’s final percentage adjustments for 2013 valuations saw a 33.88 percent increase for agricultural land and 15 percent increase for agricultural buildings.
“The reason for the increase is agricultural land is valued on productivity, not sale price,” said Union County Assessor Gene Haner. “It is averaged on a five-year process, plus two years in arrears.”
This means the 2013 valuation of agricultural land and buildings is based on the 2007-2011 production averages.
More than 20 years ago, the Iowa Legislature passed an assessment limitation law called rollback to combat high inflation rates on residential and agricultural property.
The rollback is applied to a class of property, not on an individual basis, so the statewide total taxable value can only increase 4 percent because of revaluation.
Haner said the assessment cycle takes 18 months to complete and takes place every two years.
Once the county auditor publishes the equalization order, taxpayers have until Oct. 25 to protest to local boards of review.
Then local taxing authorities adopt budgets based on the land valuations so by March 2014, all taxing entities can set levies.
The first half of taxes for the newly assessed valuation is due by Sept. 30, 2014.
While agricultural land and structures made a large jump, residential and commercial realty had no adjustments for the 2013 actual values.
The Iowa Department of Revenue is responsible for equalizing assessments. The department compares each county’s assessment with a sales assessment ratio study.
If the assessment is less than 5 percent above or below the study, no adjustments are made.
“It goes according to the sales price,” Haner said. “It is allowed to be at 95 percent to 105 percent. Since 2007, we have hit right in that area.”
Equalization contributes to an even distribution of state aid and more equally distributes the total tax burden.