Property assessment statements going out soon

To The Press

Floyd County property owners will be receiving their 2019 property assessment rolls in the mail soon, and based on sales last year, residential and commercial values are likely to be going up.

“Iowa law requires all property to be revalued every two years in the odd-numbered years,” explained Gary VanderWerf, Floyd County assessor, in a news release.

If there has been a change in the assessed value, an assessment notice must be mailed on or before April 1.

“Iowa law requires assessed values to be at 100 percent of market value,” said VanderWerf.

The changes in assessed values for residential and commercial classes of property and agricultural dwellings are driven by the market, he said. Sales from the prior year, in this case 2018, are used to set values for 2019.

Each time a property sells, a sales ratio is determined by dividing the assessed value by the selling price. When these sales are analyzed, if the middle ratio, or median, is between 95 percent and 105 percent of the total sales, no change is required.

If the median is below 95 percent, values need to be adjusted upward. If it is above 105 percent, values need to be adjusted downward, WanderWerf said.

“In 2018, there were 192 good residential sales, which is good pool of sales to help determine our future valuations,” he said. The median ratio of all those sales is 90.3 percent, meaning the average home was assessed at only 90.3 percent of its selling price.

“So assessed values will need to be adjusted upward,” he said. The exact percentage of change will vary on individual properties based on property characteristics.

“Residential, commercial and multi-residential assessments are to be at 100 percent of market value,” he repeated.

For commercial properties the sample is much smaller. There were 10 sales and 12 Department of Revenue appraisals to analyze. The Department of Revenue appraisals are randomly selected commercial properties located within Floyd County that are appraised and then treated as if they were sales for the purpose of the analysis.

Combining the median ratio of the actual sales and the appraisals, the median commercial property ratio was 87.8 percent, so commercial property assessments on average are also undervalued and will need to be adjusted upward.

No changes to the class of multi-residential properties were made, WanderWerf said, because appraisals from the Department of Revenue won’t be received until April after assessment notices need to be mailed.

“Therefore, an equalization order may be received for this class of property,” he said.

If the revaluation work is not done by the county assessor’s office, the state will issue equalization orders in October of the odd numbered year that will adjust each class of property up or down by a flat percentage.

Agricultural assessments in Iowa are determined by using a productivity and net earning capacity formula with the net income capitalized at 7 percent. Agricultural dwellings are separate from the formula.

The ag formula is calculated on a county-by-county basis using a five-year rolling average of expenses and income as determined by the USDA. Currently it is based on the years 2013-2017.

Once the per-acre value is determined, it is multiplied by the total number of taxable ag acres in the county, which results in the countywide total value for all agricultural land and buildings.

Based on this formula, Floyd County will see a reduction of almost 28 percent in the agricultural land and building value, WanderWerf said. The overall state average is also a reduction of about 28 percent for ag land and buildings.

WanderWerf said for anyone not satisfied with their assessment, there is information at the bottom of the assessment notice about what to do. They can contact the assessor’s office at the phone number listed on the assessment notice prior to date mentioned.

“It is not known how property taxes will be impacted by these valuation changes,” Vanderwerf said. “The 2019 valuations will be used to compute the property taxes payable in the fall of 2020 and the spring of 2021.

“State designated rollbacks will not be determined until the fall of 2019 and budget levies will not be determined until early 2020,” he said.

Wanderwerf said anyone interested in finding out more about the information used in the analysis can contact the Assessor’s Office.

Anyone who wants more information about how their property had been valued can go to the county website, www.floydcoia.org, and click on “GIS Property Search” on the right-hand side of the page then look up their property and verify the information there.

If any information is not correct, the property owner should contact the Assessor’s Office regarding the changes to be made.