Floyd County property owners will see double-digit valuation increases, but tax impact likely a fraction of that, says assessor

By Bob Steenson, bsteenson@charlescitypress.com

Property value assessment information should be received by most property owners in Floyd County this week, and many of them will likely be in for a shock when they see the double-digit valuation increases.

Floyd County Assessor Brandy Schmidt was at the Board of Supervisors meeting Monday morning, emphasizing that a 20% increase in the valuation of someone’s house, for example, does not mean a 20% increase in the property taxes that person will pay.

Schmidt said notices were sent to about 11,900 properties in the county.

One thing people will notice is that the format changed a little, grouping  more than one property on a page to decrease mailing costs and to make it easier to compare previous year information, Schmidt said.

“For people getting their notices just expect that to look a little different,” she said. “Another thing about the notices is you’re going to notice that the values have increased a lot.”

She said that assessed valuations for residential property in Floyd County increased about 20%, commercial property value increased about 15%, and agricultural property value increased about 34%.

“I think the first thing that citizens do is they jump to ‘What’s my taxes going to be?’ – ‘How are my taxes going to change?’” Schmidt said.

The assessed valuation is supposed to represent 100% of the market value for residential and commercial property, and 100% of the productivity value for ag land.

But state law requires the state to adjust the rollback – the percentage of the property value that property owners pay taxes on – to allow no more than a 3% increase per year per classification, Schmidt said.

The final numbers aren’t set, she said, but it it looks like the residential property rollback will go from just over 54% currently to about 46.5%.

For example, take a house that’s assessed at $100,000. Currently with the 54% rollback, that property is only being assessed for property taxes at $54,000.

If that $100,000 house increases in valuation by the average 20%, it would be valued at $120,000 for the next tax year. But with a 46.5% rollback, it would only be taxed at $55,800. That’s an increase in taxable valuation of 3.3% year to year.

Actual taxes paid on that property would also depend on what the levy rate was in each of those years, including the county tax rate, city tax rate if the property is in a city, school tax rate, community college tax rate, etc.

“This isn’t something that’s unique to Floyd County. It’s all of Iowa,” Schmidt said. “The assessors in Iowa have compiled information to show that Floyd County is in the averages, that residential increased 20 to 25% across the state, commercial was 15 to 20%, and agricultural was 30 to 40%.

She said ag values increased so much across the state because ag value is based on the productivity of the land, not its market value. The state uses a five-year rolling average and reassesses every two years.

The previous ag assessment had been based on the years 2015 through 2019, and 2015 and 2016 were low productivity years because of commodity prices, Schmidt said. The new ag valuation for 2023 uses the years 2017 through 2021, which had higher commodity prices, as well as COVID relief payments to farmers that was counted as income.

“My hope here is that when people get their assessment notice starting today that they aren’t panicked by the increase in their valuation, and they can see that there a lot of steps that go into calculating these numbers,” Schmidt said. “Obviously we don’t know what the levy rates will do, and we aren’t 100% accurate on our estimates for the rollback, but I think it shows a good picture.”

The county assessor also noted that proposed changes in property tax rules at the state level have not been settled yet, but indications are that if changes are made they will be to reduce the property tax paid by Iowa property owners.

Schmidt suggested several steps for anyone concerned about their property valuation.

“The first thing I would suggest is to go to our website and review our listing information, if we have any errors. We do mass appraisal, so the information that we have regarding your specific property does a lot to affect its value,” she said.

“The second thing I would suggest is either go to our website or websites like realtor.com and zillow.com and see what properties in your neighborhood have sold for, what they estimate your value to be. It’s a good indicator for those who have not been participating in the real estate market,” she said.

“And the last thing I would suggest is calling our office if you do those things and something still doesn’t seem right. Call us and let us go through your information with you and see if we have an error or something inaccurate, or if there’s a detail about your property that we weren’t aware of, so we can make any adjustments,” Schmidt said.

“We do have a small window of time where we can make adjustments still in house,” she said. “After that, property owners can go to the Board of Review, and then you can appeal to the state level at the Property Assessment Appeal Board, or the district court.”

Schmidt also asked for some understanding from people who are upset about their valuations.

“I would want to remind that we are homeowners ourselves. Myself and my staff are homeowners, we’re friends, we’re neighbors, and we expect this to be unsettling to a lot of people,” she said.

“But at the same time I would hope when people contact our office that they would be civil and respectful. I believe that myself and my staff are hardworking, dedicated people. We’re not just throwing darts at a board to get values. We’re using a standardized process and statistical testing, and so we’ve done our very best,” she said.