Property tax is a principal source of revenue for Iowa counties and cities, school districts and a whole host of government entities delivering public services across the state. Property tax is administered at the county level and is primarily imposed on real property, which includes land and most attached structures. For the 2016 fiscal year, property tax levies totaled more than $5.2 billion in Iowa. School districts account for roughly 41.4% of the statewide total, followed by city government at about 28.8%, counties at 22.4%, community colleges at 2.6% and county hospitals at 2.1%.

Iowa Property Tax Basics

Residential, commercial, industrial and agricultural property in Iowa is assessed every other year in odd-numbered years. Each of Iowa's 99 counties has a full-time assessor. Cities with populations over 10,000 may opt to appoint city assessors. As of May 2016, eight Iowa cities appointed an assessor. Residential, commercial and industrial property is assessed at fair market value, as determined by the local assessor on January 1 of the assessment year. Agricultural property is assessed according to a separate productivity-based valuation system. New valuations produced during an assessment year are added to property tax rolls on January 1 of the following calendar year. Taxes based on the new valuation then come due at the opening of the next fiscal year on July 1. For example, new property valuations produced for Jan. 1, 2015 were entered on the property tax rolls on Jan. 1, 2016, and will be applied to tax bills payable on July 1, 2016.

Under Iowa law, the taxable value of residential and agricultural property in the state may not grow more than 3% per year. To maintain this growth limit, the assessed value of property is subject to a reduction, known as a rollback, to produce a taxable value for the property. For property taxes that come due on July 1, 2016, the rollback for residential property is roughly 55.626%. For example, a home with a $100,000 assessed value would have a taxable value of $55,626. Agricultural property is subject to a rollback of roughly 46.1%, while commercial and industrial property is subject to a flat-rate rollback of 90%.

A homestead credit is also available to reduce the tax burden on owner-occupied residential property. To qualify, the owner-occupant must reside in the home at least six months each year and declare as an Iowa resident for state income tax purposes. For tax bills payable on July 1, 2016, homestead credit reduces the taxable value of a home by $4,850. After the rollback procedure and the homestead credit has been applied to the assessed value of a home, the local tax rate is applied to calculate the tax bill. Property tax bills are sent out after July 1 by the county treasurer. Half of the annual tax bill is due by September 30, while the second half is due no later than March 31.

Average Property Tax in Iowa

For the 2016 fiscal year, the statewide average property tax rate across residential, commercial, industrial and agricultural property in Iowa is $33.38 per $1,000 of taxable value. Property tax rates vary depending on the county. At the high end of the scale, Polk County has an average property tax rate of $42.59 per $1,000 of taxable value, followed by closely by Decatur County at $41.63 per $1,000 and Clark County at $40.83 per $1,000. At the other end of the scale, Dickinson County has an average property tax rate of $19.69 per $1,000 of taxable value, followed by Carroll County at $22.08 per $1,000 and Kossuth County at $22.69 per $1,000.

How Iowa Compares to the Nation and to Nearby States

To compare complex property tax systems across state lines effectively, it is useful to focus in on average effective tax rates on owner-occupied housing. According to a 2015 study by the Tax Foundation, Iowa homeowners paid an average effective tax rate of 1.49% on the market value of their homes. This compares with a national average of 1.19%. Although just 13 states have a higher effective property tax rate than Iowa, 1.49% is not especially high for the Midwest. The highest average rates in the Midwest belong to Illinois at 2.32%, Wisconsin at 1.96% and Nebraska at 1.84%. States coming in below Iowa include Missouri at 1.02%, Minnesota at 1.19% and South Dakota at 1.32%.

Kansas Property Tax Guide

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