Iowa Property Tax Appeals & Important Dates

In Iowa assessors in each county are responsible for valuing all property by April 1 of each odd year. Properties are appraised in the most fair manner possible and are based primarily on actual value.

What is actual value and how is it determined?

By definition, actual value is means the property’s fair and reasonable market value per Iowa Code § 441.21(1)(c).

Typically, fair market value is calculated using one of three methods:

• “Market value” is 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, neither being under any compulsion to buy or sell and each being familiar with the facts relating to the particular property.”
• Use of sales price depends on availability of sales prices of comparable properties in normal transactions.
• Comparable sales approach is the preferred method for valuing property. Though other approaches are typically analyzed and considered.

Iowa uses the following property classifications:

• Residential
• Multi-residential, including mobile home parks, assisted living, apartments with three or more dwelling units, etc. See Iowa Code § 441.21(13)(a). Prior to 2015, classified as commercial.
• Commercial
• Industrial
• Agricultural

Iowa has a biennial system of tax appeals. See Iowa Code § 428.4 with real property is assessed every two-years in odd-numbered years. Note that property may be assessed in even-numbered years. Typically occurs after a sale, renovations, etc.

Appealing an Assessment

• Step 1: Informal Review (Optional)
• Step 2: Board of Review
• Step 3 – two options
  Option A: Appeal to Property Assessment and Appeal Board
  Option B: Appeal to District Court
• Step 4: Further Appeals

Step 1: Informal Review (Optional)

• Local assessor is required to complete assessments by April 1.
• Property owner or representative may contact assessor's office between April 2 and April 25 and request an informal review of the assessment. See Iowa Code 441.30.
• During this time an Assessor may recommend a change to the Board of Review or the taxpayer and Assessor may enter into a signed written agreement modifying the assessment.
• Consider what information taxpayer is willing to share.

Step 2: Protest to Board of Review (Mandatory)

• Must be filed by April 30, unless extended due to disaster declaration.
• Some counties accept electronic filings, but check with office. If mailing, keep a copy of the post-marked envelope.
• Board of reviews meet annually in May to consider protests.
• Ask to appear at Board of Review hearing.
• Forms available, though check with County/City as some have slightly different forms. Generally available online.
• Exclusive method of relief from alleged excessive or inequitable assessment.
• Protest on one more of the following grounds:
  Assessment is not equitable compared with assessments of other like property in the taxing district.
  The property is assessed for more than the value authorized by law.
  The property is not assessable, is exempt for taxes or is misclassified.
  There is an error in the assessment.
  There is fraud or misconduct in the assessment.
• Oral hearing
  Informal process, but an opportunity to present arguments.
  Board may ask questions to taxpayer/representative.
  Assessors office may be present and may make a presentation to the Board.
  Consider what information to share.
  Time is limited.

If the taxpayer successfully challenges odd-numbered year real property tax assessment, the taxpayer is entitled to a comparable adjustment to subsequent interim-year assessment, despite the fact that taxpayers failed to make timely protest of interim year assessment. Transform, Ltd. v. Assessor of Polk County, 543 N.W.2d 614 (Iowa 1996). However, if the valuation changes in an even-numbered year, another protest should be filed.

Protests relating to clerical or mathematical errors can be filed for previous years. Iowa Code § 441.37(2) and the Board of Review may correct clerical or mathematical errors for any assessment year in which the taxes have not been fully paid or otherwise fully discharged. Clerical or mathematical error is one of writing or copying so that the assessment figure recorded was not intended by the assessor.

Step 3: Appeal to PAAB or District Court

• If unsatisfied with Board of Review decision, can appeal to Property Assessment Appeal Board (“PAAB”) or District Court for the County where the property is located.
• PAAB is a three-member Board. Two members are certified real property appraisers; one member is an attorney.
  PAAB is generally less expensive and faster.
  No filing fee.
  More relaxed Rules of Evidence.
• Appeals for the Board of Review must be filed within 20 days after the Board’s adjournment or May 31, whichever is later. See Iowa Code § 441.38(1). Compliance with deadlines is jurisdictional.

Standard of Review

• District Court and PAAB hear assessment tax appeals in equity. There is no presumption in favor of the Board of Review.
• Appeal must include the basis of the appeal and the relief sought. New grounds, in addition to those set out in the protest to the Board of Review, may be included and additional evidence may be presented. See Iowa Code § 441.37A(1)(b) and Iowa Code § 441.38(1).
• Burden of Proof: Party challenging the valuation as excessive, inadequate, inequitable or capricious has the burden of proof. However, when the complainant offers competent evidence that the market value of the property is different than the market value determined by the assessor, the burden of proof shifts to the officials seeking to uphold the value. See Iowa Code § 441.21(3)(b)(2).

Step 4: Further Appeals

• If appeal from Board of Review to PAAB:
  May seek judicial review from District Court under Chapter 17A. See Iowa Code § 441.37B. Unless permitted under Chapter 17A, cannot present new evidence.
• If appeal from Board of Review to District Court:
  If unsatisfied with District Court decision, may file a Notice of Appeal to the Supreme Court.
  De novo standard of review.

Evidence at Hearing: Appraisals

Three Approaches to Value:

• Sales Comparable Approach - Preferred approach, when available.
  Value depends on availability of comparable sales.
  Best comparable sales are geographically similar, close in time to valuation date, similar properties, etc.
  Appraiser typically adjusts the sales prices of comparable sales as needed to adjust for differences in subject property and comparable properties.
• Cost Approach
  Analyzes the replacement cost for the property, less depreciation.
  Based on the principle that the buyer would pay no more than cost to produce a substitute property, with equal utility.
  Appraisers use cost guide, such as Marshall Valuation Service to determine replacement cost.
  Can be of limited value in older properties or properties with significant depreciation.
• Income Approach
  Analyzes the property’s income producing capabilities.
  Estimates the amount an investor would be willing to pay to receive an income stream over time.
  Typically calculated by dividing the market-derived net operating income by the capitalization rate.

Ideally, use all three approaches to check each other. Values should be relatively consistent.