We perform property tax appeals all over the State of Iowa on agricultural, commercial and industrial properties. Property owners are often unaware of the property assessment appeal process and its potential benefits.
When to appeal?
As the State of Iowa reminded your pocketbook this month, property taxes are paid in semi-annual installments due every year on September 30 and March 31. The amount of property tax payable is based upon the assessed value of a particular property as determined by the county assessor where the property is located. Following are some important dates concerning the 2013 property tax assessment cycle:
- January 1, 2013 the county assessor issues new assessments on properties within its county (this occurs on January 1 of every odd year).
- March 31, 2013 second half of property taxes due (based upon 2011 assessed value).
- April 15, 2013 notification of your property’s 2013 assessed value.
- April 16 -May 5, 2013 period for appeal of your property’s 2013 assessed value to the local board of review.
- May 1 – May 31, 2013 county boards of review meet to consider appeals filed by property owners.
- September 30, 2013 first half of property taxes due (based upon 2011 assessed value).
- March 1, 2014 county board of supervisors levies the tax on your property.
- March 31, 2014 second half of property taxes due (based upon 2011 assessed value).
- September 30, 2014 first half of property taxes due (based upon 2013 assessed value).
- March 31, 2015 second half of property taxes due (based upon 2013 assessed value).
It is important that your property’s assessed value is accurate. In the event it is inaccurate, the property owner has the right to appeal that property’s assessed value. The initial appeal must be filed between April 16 and May 5 of the reassessment year.
Following the decision of the local board of review, the property owner can then appeal to the Property Assessment Appeal Board (PAAB), and the PAAB decision can then be appealed to the district court. Alternatively, the property owner can forego the appeal to PAAB and instead take the appeal directly the district court.
On what grounds?
The following are grounds for an appeal of your property’s assessed value:
- Your property’s assessed value is not comparable to similar properties’ assessed values.
- Your property’s assessed value is higher than its actual value.
- Your property is exempt from taxation.
- Your property’s assessment contains an error(s).
- Your property’s assessment is fraudulent.
The most common grounds for appeal are (1) and (2), above. But what is the appropriate assessed value? According to Iowa law, all property subject to taxation shall be assessed at its market value, defined as the fair and reasonable exchange in the year in which the property is listed and valued between a willing buyer and a willing seller. I.C.A. § 441.21(1)(b)(1). Further, if such a sale exists, the sales price may require adjustment, or be disregarded entirely, in the event that there were abnormal factors which distort market value. Id.
Typically, sales of properties between a willing buyer and seller during the reassessment year are few and far between. In the absence of such a sale, market value is determined using the other factors approach, which considers the property’s productive and earning capacity; industrial conditions; cost; physical and functional depreciation and obsolescence and replacement cost; and all other factors which would assist in determining the fair and reasonable market value of the property. I.C.A. § 441.21(2).
How do you know whether your property is accurately assessed? Who determines whether a previous sale was distorted by market value? What is the proper assessed value? The key to the answer to all of these questions is a qualified appraiser. We work directly with several appraisers who are experts in their field, and who perform appraisals to assist us in the appeal process. We can recommend an appraiser who can assist you with an appraisal of your property.
Is an appeal worth it?
An appeal is only feasible if it makes financial sense i.e. if successful it will save you more money than it costs. The practicality of an appeal is directly dependent upon the value of your property. We recently performed a commercial property appeal that saved our client approximately $125,000 annually. Lastly, a successful appeal may influence a reduction in future assessments of the property.
What do you need to know?
- Your property will be reassessed for tax purposes on January 1, 2013.
- You have from April 16, 2013 until May 5, 2013, to file your initial appeal of the January 1, 2013 reassessment.
- You should strongly consider an appeal IF your reasonably anticipated tax savings outweigh your appeal process expense.
- You should begin researching potential appraisers to determine their cost as well as their reputation within the industry.
If you, or someone you know, are in need of legal services regarding a property tax assessment appeal, please feel free to contact the Kreamer Law Firm, P.C. through our website or by calling (515) 727-0900.