April 2017 WATCHDOG
State law requires that all real property be reassessed every two years. Under the law the assessed value is to be based on the reasonable market value of the property. "Market value" is defined as the fair and reasonable exchange between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and each being familiar with all the facts relating to the particular property. In determining market value, the assessor first looks to comparable sales. In the unusual case where no comparable sales are available, the assessor then considers the cost of the property and/or, in the case of income property, a valuation based on the income production from the property.
The assessor will further review the comparable sales result for consistency with sales ratio studies, analysis of local conditions, and economic trends both in and outside the construction industry. Determining the market value in this way is commonly referred to as the MARKET APPROACH.
The COST APPROACH is an estimate of how many dollars at current labor and material prices it would take to replace your property with one similar to it. In the event improvement is not new appropriate adjustments for depreciation and obsolescence would be deducted from replacement value. Value of the land then would be added to arrive to the total estimate of value.
The INCOME APPROACH is used only for income producing property, such as an apartment or office building. In that case, your property 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.
If you have any questions about the assessment of your property, feel free to visit or call the Assessor’s office to ask questions. Having your questions answered will help you to understand Iowa’s property tax system. If you disagree with the assessor’s estimate of value, it is most important to analyze whether appropriate comparable properties have been considered.
You have the option of filing a written protest with the Board of Review. The Board operates independently of the assessor’s office, and has the power to confirm or to adjust either upward or downward any assessment.
Appeals from the board of review actions can be made to the Property Assessment Appeal Board (PAAB) within 20 days after the adjournment date of the board of review or May 31, whichever is later. You may bypass the Property Assessment Appeal Board and appeal directly to district court. (Sections 441.37A, 441.38, and 441.39 - Code of Iowa)