441.21 ACTUAL, ASSESSED, AND TAXABLE VALUE.
1. a. All property subject to taxation shall be valued at its
actual value which shall be entered opposite each item, and, except
as otherwise provided in this section, shall be assessed at one
hundred percent of its actual value, and the value so assessed shall
be taken and considered as the assessed value and taxable value of
the property upon which the levy shall be made.
b. The actual value of all property subject to assessment and
taxation shall be the fair and reasonable market value of such
property except as otherwise provided in this section. "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 all the facts relating to the
particular property. Sale prices of the property or comparable
property in normal transactions reflecting market value, and the
probable availability or unavailability of persons interested in
purchasing the property, shall be taken into consideration in
arriving at its market value. In arriving at market value, sale
prices of property in abnormal transactions not reflecting market
value shall not be taken into account, or shall be adjusted to
eliminate the effect of factors which distort market value, including
but not limited to sales to immediate family of the seller,
foreclosure or other forced sales, contract sales, discounted
purchase transactions or purchase of adjoining land or other land to
be operated as a unit.
The actual value of special purpose tooling, which is subject to
assessment and taxation as real property under section 427A.1,
subsection 1, paragraph "e", but which can be used only to
manufacture property which is protected by one or more United States
or foreign patents, shall not exceed the fair and reasonable exchange
value between a willing buyer and a willing seller, assuming that the
willing buyer is purchasing only the special purpose tooling and not
the patent covering the property which the special purpose tooling is
designed to manufacture nor the rights to manufacture the patented
property. For purposes of this paragraph, special purpose tooling
includes dies, jigs, fixtures, molds, patterns, and similar property.
The assessor shall not take into consideration the special value or
use value to the present owner of the special purpose tooling which
is designed and intended solely for the manufacture of property
protected by a patent in arriving at the actual value of the special
purpose tooling.
c. In assessing and determining the actual value of special
purpose industrial property having an actual value of five million
dollars or more, the assessor shall equalize the values of such
property with the actual values of other comparable special purpose
industrial property in other counties of the state. Such special
purpose industrial property includes, but is not limited to chemical
plants. If a variation of ten percent or more exists between the
actual values of comparable industrial property having an actual
value of five million dollars or more located in separate counties,
the assessors of the counties shall consult with each other and with
the department of revenue to determine if adequate reasons exist for
the variation. If no adequate reasons exist, the assessors shall
make adjustments in the actual values to provide for a variation of
ten percent or less. For the purposes of this paragraph, special
purpose industrial property includes structures which are designed
and erected for operation of a unique and special use, are not
rentable in existing condition, and are incapable of conversion to
ordinary commercial or industrial use except at a substantial cost.
d. Actual value of property in one assessing jurisdiction
shall be equalized as compared with actual value of property in an
adjoining assessing jurisdiction. If a variation of five percent or
more exists between the actual values of similar, closely adjacent
property in adjoining assessing jurisdictions in Iowa, the assessors
thereof shall determine whether adequate reasons exist for such
variation. If no such reasons exist, the assessors shall make
adjustments in such actual values to reduce the variation to five
percent or less.
e. The actual value of agricultural property shall be
determined on the basis of productivity and net earning capacity of
the property determined on the basis of its use for agricultural
purposes capitalized at a rate of seven percent and applied uniformly
among counties and among classes of property. Any formula or method
employed to determine productivity and net earning capacity of
property shall be adopted in full by rule.
f. In counties or townships in which field work on a modern
soil survey has been completed since January 1, 1949, the assessor
shall place emphasis upon the results of the survey in spreading the
valuation among individual parcels of such agricultural property.
g. Notwithstanding any other provision of this section, the
actual value of any property shall not exceed its fair and reasonable
market value, except agricultural property which shall be valued
exclusively as provided in paragraph "e" of this subsection.
h. The assessor shall determine the value of real property in
accordance with rules adopted by the department of revenue and in
accordance with forms and guidelines contained in the real property
appraisal manual prepared by the department as updated from time to
time. Such rules, forms, and guidelines shall not be inconsistent
with or change the means, as provided in this section, of determining
the actual, market, taxable, and assessed values.
i. If the department finds that a city or county assessor is
not in compliance with the rules of the department relating to
valuation of property or has disregarded the forms and guidelines
contained in the real property appraisal manual, the department shall
notify the assessor and each member of the conference board for the
appropriate assessing jurisdiction. The notice shall be mailed by
restricted certified mail. The notice shall specify the areas of
noncompliance and the steps necessary to achieve compliance. The
notice shall also inform the assessor and conference board that if
compliance is not achieved, a penalty may be imposed.
The conference board shall respond to the department within thirty
days of receipt of the notice of noncompliance. The conference board
may respond to the notice by asserting that the assessor is in
compliance with the rules, guidelines, and forms of the department or
by informing the department that the conference board intends to
submit a plan of action to achieve compliance. If the conference
board responds to the notification by asserting that the assessor is
in compliance, a hearing before the director of revenue shall be
scheduled on the matter.
A plan of action shall be submitted within sixty days of receipt
of the notice of noncompliance. The plan shall contain a time frame
under which compliance shall be achieved which shall be no later than
January 1 of the following assessment year. The plan of action shall
contain the signature of the assessor and of the chairperson of the
conference board. The department shall review the plan to determine
whether the plan is sufficient to achieve compliance. Within thirty
days of receipt of the plan, the department shall notify the assessor
and the chairperson of the conference board that it has accepted the
plan or that it is necessary to submit an amended plan of action.
By January 1 of the assessment year following the calendar year in
which the plan was submitted to the department, the conference board
shall submit a report to the department indicating that the plan of
action was followed and compliance has been achieved. The department
may conduct a field inspection to ensure that the assessor is in
compliance. By January 31, the department shall notify the assessor
and the conference board, by restricted certified mail, either that
compliance has been achieved or that the assessor remains in
noncompliance. If the department determines that the assessor
remains in noncompliance, the department shall take steps to withhold
up to five percent of the reimbursement payment authorized in section
425.1 until the director of revenue determines that the assessor is
in compliance.
If the conference board disputes the determination of the
department, the chairperson of the conference board may appeal the
determination to the state board of tax review.
The department shall adopt rules relating to the administration of
this paragraph "i".
2. In the event market value of the property being assessed
cannot be readily established in the foregoing manner, then the
assessor may determine the value of the property using the other
uniform and recognized appraisal methods including its productive and
earning capacity, if any, industrial conditions, its 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 but the actual value shall
not be determined by use of only one such factor. The following
shall not be taken into consideration: Special value or use value of
the property to its present owner, and the goodwill or value of a
business which uses the property as distinguished from the value of
the property as property. However, in assessing property that is
rented or leased to low-income individuals and families as authorized
by section 42 of the Internal Revenue Code, as amended, and which
section limits the amount that the individual or family pays for the
rental or lease of units in the property, the assessor shall use the
productive and earning capacity from the actual rents received as a
method of appraisal and shall take into account the extent to which
that use and limitation reduces the market value of the property.
The assessor shall not consider any tax credit equity or other
subsidized financing as income provided to the property in
determining the assessed value. The property owner shall notify the
assessor when property is withdrawn from section 42 eligibility under
the Internal Revenue Code. The property shall not be subject to
section 42 assessment procedures for the assessment year for which
section 42 eligibility is withdrawn. This notification must be
provided to the assessor no later than March 1 of the assessment year
or the owner will be subject to a penalty of five hundred dollars for
that assessment year. The penalty shall be collected at the same
time and in the same manner as regular property taxes. Upon adoption
of uniform rules by the department of revenue or succeeding authority
covering assessments and valuations of such properties, the valuation
on such properties shall be determined in accordance with such rules
and in accordance with forms and guidelines contained in the real
property appraisal manual prepared by the department as updated from
time to time for assessment purposes to assure uniformity, but such
rules, forms, and guidelines shall not be inconsistent with or change
the foregoing means of determining the actual, market, taxable and
assessed values.
3. "Actual value", "taxable value", or "assessed
value" as used in other sections of the Code in relation to
assessment of property for taxation shall mean the valuations as
determined by this section; however, other provisions of the Code
providing special methods or formulas for assessing or valuing
specified property shall remain in effect, but this section shall be
applicable to the extent consistent with such provisions. The
assessor and department of revenue shall disclose at the written
request of the taxpayer all information in any formula or method used
to determine the actual value of the taxpayer's property.
The burden of proof shall be upon any complainant attacking such
valuation as excessive, inadequate, inequitable, or capricious;
however, in protest or appeal proceedings when the complainant offers
competent evidence by at least two disinterested witnesses that the
market value of the property is less than the market value determined
by the assessor, the burden of proof thereafter shall be upon the
officials or persons seeking to uphold such valuation to be assessed.
4. For valuations established as of January 1, 1979, the
percentage of actual value at which agricultural and residential
property shall be assessed shall be the quotient of the dividend and
divisor as defined in this section. The dividend for each class of
property shall be the dividend as determined for each class of
property for valuations established as of January 1, 1978, adjusted
by the product obtained by multiplying the percentage determined for
that year by the amount of any additions or deletions to actual
value, excluding those resulting from the revaluation of existing
properties, as reported by the assessors on the abstracts of
assessment for 1978, plus six percent of the amount so determined.
However, if the difference between the dividend so determined for
either class of property and the dividend for that class of property
for valuations established as of January 1, 1978, adjusted by the
product obtained by multiplying the percentage determined for that
year by the amount of any additions or deletions to actual value,
excluding those resulting from the revaluation of existing
properties, as reported by the assessors on the abstracts of
assessment for 1978, is less than six percent, the 1979 dividend for
the other class of property shall be the dividend as determined for
that class of property for valuations established as of January 1,
1978, adjusted by the product obtained by multiplying the percentage
determined for that year by the amount of any additions or deletions
to actual value, excluding those resulting from the revaluation of
existing properties, as reported by the assessors on the abstracts of
assessment for 1978, plus a percentage of the amount so determined
which is equal to the percentage by which the dividend as determined
for the other class of property for valuations established as of
January 1, 1978, adjusted by the product obtained by multiplying the
percentage determined for that year by the amount of any additions or
deletions to actual value, excluding those resulting from the
revaluation of existing properties, as reported by the assessors on
the abstracts of assessment for 1978, is increased in arriving at the
1979 dividend for the other class of property. The divisor for each
class of property shall be the total actual value of all such
property in the state in the preceding year, as reported by the
assessors on the abstracts of assessment submitted for 1978, plus the
amount of value added to said total actual value by the revaluation
of existing properties in 1979 as equalized by the director of
revenue pursuant to section 441.49. The director shall utilize
information reported on abstracts of assessment submitted pursuant to
section 441.45 in determining such percentage. For valuations
established as of January 1, 1980, and each year thereafter, the
percentage of actual value as equalized by the director of revenue as
provided in section 441.49 at which agricultural and residential
property shall be assessed shall be calculated in accordance with the
methods provided herein including the limitation of increases in
agricultural and residential assessed values to the percentage
increase of the other class of property if the other class increases
less than the allowable limit adjusted to include the applicable and
current values as equalized by the director of revenue, except that
any references to six percent in this subsection shall be four
percent.
5. For valuations established as of January 1, 1979, commercial
property and industrial property, excluding properties referred to in
section 427A.1, subsection 8, shall be assessed as a percentage of
the actual value of each class of property. The percentage shall be
determined for each class of property by the director of revenue for
the state in accordance with the provisions of this section. For
valuations established as of January 1, 1979, the percentage shall be
the quotient of the dividend and divisor as defined in this section.
The dividend for each class of property shall be the total actual
valuation for each class of property established for 1978, plus six
percent of the amount so determined. The divisor for each class of
property shall be the valuation for each class of property
established for 1978, as reported by the assessors on the abstracts
of assessment for 1978, plus the amount of value added to the total
actual value by the revaluation of existing properties in 1979 as
equalized by the director of revenue pursuant to section 441.49. For
valuations established as of January 1, 1979, property valued by the
department of revenue pursuant to chapters 428, 433, 437, and 438
shall be considered as one class of property and shall be assessed as
a percentage of its actual value. The percentage shall be determined
by the director of revenue in accordance with the provisions of this
section. For valuations established as of January 1, 1979, the
percentage shall be the quotient of the dividend and divisor as
defined in this section. The dividend shall be the total actual
valuation established for 1978 by the department of revenue, plus ten
percent of the amount so determined. The divisor for property valued
by the department of revenue pursuant to chapters 428, 433, 437, and
438 shall be the valuation established for 1978, plus the amount of
value added to the total actual value by the revaluation of the
property by the department of revenue as of January 1, 1979. For
valuations established as of January 1, 1980, commercial property and
industrial property, excluding properties referred to in section
427A.1, subsection 8, shall be assessed at a percentage of the actual
value of each class of property. The percentage shall be determined
for each class of property by the director of revenue for the state
in accordance with the provisions of this section. For valuations
established as of January 1, 1980, the percentage shall be the
quotient of the dividend and divisor as defined in this section. The
dividend for each class of property shall be the dividend as
determined for each class of property for valuations established as
of January 1, 1979, adjusted by the product obtained by multiplying
the percentage determined for that year by the amount of any
additions or deletions to actual value, excluding those resulting
from the revaluation of existing properties, as reported by the
assessors on the abstracts of assessment for 1979, plus four percent
of the amount so determined. The divisor for each class of property
shall be the total actual value of all such property in 1979, as
equalized by the director of revenue pursuant to section 441.49, plus
the amount of value added to the total actual value by the
revaluation of existing properties in 1980. The director shall
utilize information reported on the abstracts of assessment submitted
pursuant to section 441.45 in determining such percentage. For
valuations established as of January 1, 1980, property valued by the
department of revenue pursuant to chapters 428, 433, 437, and 438
shall be assessed at a percentage of its actual value. The
percentage shall be determined by the director of revenue in
accordance with the provisions of this section. For valuations
established as of January 1, 1980, the percentage shall be the
quotient of the dividend and divisor as defined in this section. The
dividend shall be the total actual valuation established for 1979 by
the department of revenue, plus eight percent of the amount so
determined. The divisor for property valued by the department of
revenue pursuant to chapters 428, 433, 437, and 438 shall be the
valuation established for 1979, plus the amount of value added to the
total actual value by the revaluation of the property by the
department of revenue as of January 1, 1980. For valuations
established as of January 1, 1981, and each year thereafter, the
percentage of actual value as equalized by the director of revenue as
provided in section 441.49 at which commercial property and
industrial property, excluding properties referred to in section
427A.1, subsection 8, shall be assessed shall be calculated in
accordance with the methods provided herein, except that any
references to six percent in this subsection shall be four percent.
For valuations established as of January 1, 1981, and each year
thereafter, the percentage of actual value at which property valued
by the department of revenue pursuant to chapters 428, 433, 437, and
438 shall be assessed shall be calculated in accordance with the
methods provided herein, except that any references to ten percent in
this subsection shall be eight percent. Beginning with valuations
established as of January 1, 1979, and each year thereafter, property
valued by the department of revenue pursuant to chapter 434 shall
also be assessed at a percentage of its actual value which percentage
shall be equal to the percentage determined by the director of
revenue for commercial property, industrial property, or property
valued by the department of revenue pursuant to chapters 428, 433,
437, and 438, whichever is lowest.
6. Beginning with valuations established as of January 1, 1978,
the assessors shall report the aggregate taxable values and the
number of dwellings located on agricultural land and the aggregate
taxable value of all other structures on agricultural land.
Beginning with valuations established as of January 1, 1981, the
agricultural dwellings located on agricultural land shall be valued
at their market value as defined in this section and agricultural
dwellings shall be valued as rural residential property and shall be
assessed at the same percentage of actual value as is all other
residential property.
7. For the purpose of computing the debt limitations for
municipalities, political subdivisions and school districts, the term
"actual value" means the "actual value" as determined by
subsections 1 to 3 of this section without application of any
percentage reduction and entered opposite each item, and as listed on
the tax list as provided in section 443.2 as "actual value".
Whenever any board of review or other tribunal changes the
assessed value of property, all applicable records of assessment
shall be adjusted to reflect such change in both assessed value and
actual value of such property.
8. a. Any normal and necessary repairs to a building, not
amounting to structural replacements or modification, shall not
increase the taxable value of the building. This paragraph applies
only to repairs of two thousand five hundred dollars or less per
building per year.
b. Notwithstanding paragraph "a", any construction or
installation of a solar energy system on property classified as
agricultural, residential, commercial, or industrial property shall
not increase the actual, assessed and taxable values of the property
for five full assessment years.
c. As used in this subsection, "solar energy system"
means either of the following:
(1) A system of equipment capable of collecting and converting
incident solar radiation or wind energy into thermal, mechanical or
electrical energy and transforming these forms of energy by a
separate apparatus to storage or to a point of use which is
constructed or installed after January 1, 1978.
(2) A system that uses the basic design of the building to
maximize solar heat gain during the cold season and to minimize solar
heat gain in the hot season and that uses natural means to collect,
store, and distribute solar energy which is constructed or installed
after January 1, 1981.
d. In assessing and valuing the property for tax purposes,
the assessor shall disregard any market value added by a solar energy
system to a building. The director of revenue shall adopt rules,
after consultation with the office of energy independence, specifying
the types of equipment and structural components to be included under
the guidelines provided in this subsection.
9. Not later than November 1, 1979, and November 1 of each
subsequent year, the director shall certify to the county auditor of
each county the percentages of actual value at which residential
property, agricultural property, commercial property, industrial
property, and property valued by the department of revenue pursuant
to chapters 428, 433, 434, 437, and 438 in each assessing
jurisdiction in the county shall be assessed for taxation. The
county auditor shall proceed to determine the assessed values of
agricultural property, residential property, commercial property,
industrial property, and property valued by the department of revenue
pursuant to chapters 428, 433, 434, 437, and 438 by applying such
percentages to the current actual value of such property, as reported
to the county auditor by the assessor, and the assessed values so
determined shall be the taxable values of such properties upon which
the levy shall be made.
10. The percentage of actual value computed by the director for
agricultural property, residential property, commercial property,
industrial property and property valued by the department of revenue
pursuant to chapters 428, 433, 434, 437, and 438 and used to
determine assessed values of those classes of property does not
constitute a rule as defined in section 17A.2, subsection 11.
11. Beginning with valuations established on or after January 1,
1995, as used in this section, "residential property" includes
all land and buildings of multiple housing cooperatives organized
under chapter 499A and includes land and buildings used primarily for
human habitation which land and buildings are owned and operated by
organizations that have received tax-exempt status under section
501(c)(3) of the Internal Revenue Code and rental income from the
property is not taxed as unrelated business income under section
422.33, subsection 1A.
12. Beginning with valuations established on or after January 1,
2002, as used in this section, "agricultural property" includes
the real estate of a vineyard and buildings used in connection with
the vineyard, including any building used for processing wine if such
building is located on the same parcel as the vineyard. Section History: Early Form
[C97, § 1305; S13, § 1305; C24, 27, 31, 35, 39, § 7109; C46, §
441.4; C50, 54, 58, § 441.13; C62, 66, 71, 73, 75, 77, 79, 81, §
441.21; 81 Acts, ch 144, § 1; 82 Acts, ch 1100, § 22, ch 1159, §
1--3, ch 1186, § 4, 5] Section History: Recent Form
83 Acts, ch 202, § 22, 23; 84 Acts, ch 1223, § 1; 88 Acts, ch
1116, § 1; 89 Acts, ch 176, §1; 89 Acts, ch 296, §63; 95 Acts, ch 83,
§28; 95 Acts, ch 157, §1; 96 Acts, ch 1034, § 40; 97 Acts, ch 23,
§51; 99 Acts, ch 114, §28; 2001 Acts, ch 119, §1; 2002 Acts, ch 1150,
§13; 2002 Acts, ch 1153, §1, 2; 2003 Acts, ch 145, §286; 2004 Acts,
ch 1073, §29; 2005 Acts, ch 150, §124, 125; 2009 Acts, ch 108, §16,
41
Referred to in § 331.512, 403.20, 420.207, 425.11, 427.1(8, 9,
19a), 427B.26, 428.29, 432.7, 433.6, 434.15, 437.7, 438.13, 441.17,
441.49, 443.2, 443.22