Understanding Your Assessment

“Why am I receiving an assessment notice?” The assessed value represents the value of the property on January 1 of each year. Each property owner is notified by assessment notice any time there is a change in value to their property. Assessment notices are required by law to be mailed by April 1.

“Does the Assessor raise my value according to the amount of taxes needed?” The simple answer is NO. The Assessor raises or lowers property values according to the market value of real estate, or in the case of agricultural land & buildings, according to a 5 year average of productivity. The Assessor does not calculate taxes or know what the taxes will be based on the new valuation. Assessments are set January 1 of each year, while the rollback and tax levy rates on these assessments are not set until the following year. The assessor is not involved in calculating taxes or mailing the tax statements out.

“What causes property values to change?” All sales information for Guthrie County is sent to the Iowa Department of Revenue (IDR) every year for Residential, Commercial and Multi-residential sales. Only the useable/normal sales in Guthrie County are used to determine what the market trend is when conducting the sales ratio analysis for Guthrie County. The Department of Revenue lets each assessing jurisdiction know what percentage of increase or decrease is needed to be at 100% market value from the median of all sales during an odd year. It is then up to the Assessor to follow through with that increase or decrease as directed. Research of sales ratio studies, analysis of local conditions, and current construction costs are used in determining assessments for the classes of Residential, Commercial and Multi–residential property. In the case of agricultural land & buildings, the value is determined according to a productivity formula and CSR2’s (Corn Suitability Ratings).

In recent years, many residential property owners may have noticed a change in their property value due to the median of all residential sales not being within tolerance with the IDR. The easiest way to explain this change is because many of the sales were properties that sold for significantly higher prices than the last assessed value. Simply put, these high sale prices in the market are driving up the assessed values across Guthrie County.

Agricultural land & buildings, on the other hand, may have noticed a decrease in value. Ag land & building values are determined by the IDR and are calculated using averages over five-year increments.

If the Assessor does not increase or decrease property values as indicated by the market and directed by the Department of Revenue, then the Department of Revenue will make these changes by issuing an equalization order in an odd year and direct the Auditor to apply the order. Equalization orders are given in lump percentages straight across the board, countywide. That could mean some towns or townships or neighborhoods could increase or decrease at an inequitable rate compared to others.

“When should an assessment be appealed?” Property owners who disagree with the assessor’s estimate of market value of their property should ask themselves, “Could I sell this property for that amount today?” If the answer is yes, then the value is probably correct. Every property owner does have the right to appeal an assessment.

Two ways to appeal:

The Informal assessment review within the assessor’s office is between April 2 and April 25.

The formal petition period is between April 2 and April 30 and that petition is to be reviewed by the Guthrie County Board of Review. Details regarding the protest periods are on the assessment notice and forms will be available on our website, at our office or the Iowa Department of Revenue website at https://tax.iowa.gov

Where can I find more information on my property?” You may access your property information by clicking on Query County Parcel Data.  From there you can search by deed holder, address or parcel ID number. Please take a minute to verify the data for accuracy in listing. Our assessment info should mirror what a realtor would list your property as, when it would be listed for sale. For example: how many bathrooms, basement finish, deck size, detached garage, etc…

“Why did my taxes go up?” There could be many reasons why your taxes change from year to year. It is possible the valuation changed, or the rollback changed, and/or the levy rate changed. If you have a homestead credit, the amount may vary each year due to a levy rate change. This credit is based on $4850 times your current levy rate in your area. Maybe another exemption or credit amount changed. There are many variables to the tax equation that could make your taxes fluctuate from year to year.

“What is the rollback?” The rollback on your tax statement is the actual taxable value. Taxable value is the value determined by the county auditor after application of a rollback factor to the assessed value. Taxable value is calculated by multiplying the rollback rate for the correct property class by the equalized 100% actual value.

The rollback rate is a statewide rate set annually for each property class by the Iowa Department of Revenue.  More than 20 years ago, residential property values were rising quickly.  To help cushion the impact of high inflation, the Legislature passed an assessment limitation law called rollback.  Increases in assessed values for residential and agricultural property are subject to this assessment limitation formula.  If the statewide increase in values of homes and farms exceeds 3 percent due to revaluation, their values are “rolled back” so that the total increase statewide is 3 percent.  Rollback is also available for industrial and commercial property when necessary.  This does not mean that the assessment on your home will increase by only 3 percent.  The rollback is applied on a class of property, not an individual property.  This means that the statewide total taxable value can increase by only 3 percent due to revaluation.

“What is a levy rate?” There are a number of different taxing districts in a jurisdiction, each with a different levy rate.  Each year the county auditor determines for that district, a levy rate that will yield enough money to fund the different entities in that district.  The entities include local schools, counties, cities, townships, community colleges, local assessors, and others.  Since more than one taxing authority is calculating a tax rate for the property, all the rates are added together, resulting in a single tax levy called a consolidated levy.  This consolidated levy is always the result of two or more tax rates established by different government entities. The tax entities on the bottom of your tax statement are the entities asking for your tax dollars.

“What does property taxes pay for? Schools – inquire with your school board representative, city – inquire with your local city council member, county services – inquire with your supervisor in your district or the auditor, hospital – inquire with a hospital board member, assessor –inquire with the assessor, township trustees – contact your township trustee, local extension office –contact your local office, Rural improvement Zone (RIZ) -contact a board member, and misc. other services. If you want to know more about each of these budgets, attend a public budget hearing or monthly meeting if applicable to that taxing entity.

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