(Red Oak, Iowa) – Montgomery County Auditor Jill Ozuna reports property tax bills have been sent out by the Montgomery County Treasurer’s Office. The tax bills are the result of an annual property tax process that involves determining the value of each individual property parcel in the county and applying the property tax needs of various local entities to the sum of those values.
Ozuna says “The property tax cycle in Iowa takes a total of eighteen months from start to finish. It begins with the assessor determining the assessed values and classification for individual parcels of property on January 1st of the assessment year. The first half payment for property taxes related to this assessment is due in the fall of the next year and the second half payment is due in the spring of the year following the first half payment. As an example, the assessment for January 2023 would have the associated taxes due in the fall of 2024 and the spring of 2025.”
The Iowa property tax is primarily a tax on real property, land, buildings, structures, and other improvements that are constructed on or in the land, attached to the land, or placed upon a foundation. Additionally, the Department of Revenue assesses some property.
Classes of real property include:
• Residential
• Agricultural
• Commercial
• Industrial
• Utilities/railroad (state assessed)
Primary recipients of property taxes levied include:
• K-12 Schools
• Cities
• Counties
• Hospitals
• Merged Area Schools
• Assessors
• Townships
• Agricultural Extension Districts
Current details on property taxes paid and levied are available from the Iowa Department of Management. For instance, each residential property in the state will pay taxes on 54.6501% (from 54.1302%) of its assessed value during this fiscal year. For agricultural property, it’s 91.6430% (from 84.0412%). For commercial and industrial, it’s 90%. For multi-residential property, it’s 54.6501% (from 63.75).
All real property is assessed every odd-numbered year. Centrally assessed properties, including railroads and public utilities, are assessed every year. Residential, commercial, industrial, and state assessed properties are to be valued at actual value or market value. Agricultural property is assessed based on a statewide productivity value, which is a use value. A few additional exceptions to the market value requirement for real property assessment include Section 42 housing and newly platted property.
The role of the Department of Revenue is to have and exercise general supervision of the administration of the assessment and tax laws of the state, over boards of supervisors and all other officers or boards in performance of their official duties in matters relating to assessments and taxation. The Director of Revenue determines the uniformity of aggregate valuation as between the various assessing jurisdictions through the equalization process.
The equalization process occurs every odd year thus, this current year 2023. The Department examines declaration of valuation documents from sales transactions and uses this information to determine the level assessment in an assessing jurisdiction. This level of assessment for the prior year is used to establish the 100% aggregate valuation for the current year. The abstract of assessment submitted by the assessor for the current odd year must be within 5% above or below the established 100% aggregate valuation. In the case where the aggregate valuation for the current year is not within 5%, the Department orders the county auditor to increase or decrease the aggregate valuation to be equivalent to the 100% valuation determined by the Department.
Iowa statutes determine which local authorities have the power to levy tax dollars. These authorities determine their own budgetary needs. The budgets are used to provide the required and desired services received by local taxpayers. Approved budgets are submitted to the county auditor, who then determines levy rates associated to each authority based on the aggregate taxable value for each authority. The sum of the levy rates for each authority is considered the consolidated levy rate for each tax district, which is the unique combination of authorities. The consolidated levy rates are expressed as mills or dollars per thousand. Credits are subtracted from the final tax bill. An example of a credit that reduces the final tax bill is the Homestead Tax Credit.
What does property tax in Montgomery County pay for?
• 39.34% to Schools
• 29.02% to County
• 17.12% to Cities
• 8.34% to Montgomery County Memorial Hospital
• 2.62% to Area Schools (IWCC & SWCC)
• 1.74% to Assessor
• Less than 1% to Montgomery County Ag Extension
• Less than 1% to Brucellosis &Tuberculosis Eradication Fund
These governing boards and councils determine property tax needs by deadlines in March and April. The County Auditor’s office applies these taxing needs to the county’s taxable valuation and calculates the amount of tax owed by each property owner. Oftentimes, tax credits and exemptions are applied at an individual property parcel level. These tax amounts are provided to the County Treasurer, who sends out detailed bills and collects taxes.
Jill Ozuna says “This is a very simplified look at the property tax system.” For questions, contact the County Assessor, Sharon Dalton at 712-623-4171, the County Auditor Jill Ozuna at 712-623-5127, and/or the County Treasurer Jackie Porter at 712-623-3292. You may also visit www.montgomerycountyia.gov for more information on the Montgomery County budget that includes county funds and property tax levies.
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