State: More property will be taxed
The tax rates on agricultural and residential properties will increase for Iowans beginning next September. The Iowa Department of Revenue announced last week that it would increase the percent of a person’s property value that can be taxed. The increase is about 4 percent.
The percent of taxable value on residential property will rise from 50.75 percent to 52.82 percent. Residential property includes farm dwellings.
The taxable value of agricultural property is higher than residential property, and it, too, will rise. Ag land will be taxed at 59.93 percent of its value, compared to the 2011 level of 57.54 percent.
Residential property in Iowa is valued at $137.5 billion, of which $72.6 billion is taxable. That is almost three times more than the value of the agricultural property, which comes to $47.7 billion, of which $28.6 billion is taxable.
The other property classifications were spared the tax increases. The Iowa Department of Revenue determined that the other property classes such as commercial, industrial, railroad and utility did not rise significantly in assessed value and thus their tax rates will remain the same.
Property values in agricultural, residential and commercial land have increased modestly in Washington County over the past year. Ag land increased by about 1 percent from $605 million to $610 million from 2011 to 2012. In that same time, residential property increased by half a percent from $799 million to $802 million. Commercial property increased by about 2.5 percent from $181 million to $186 million.
The new tax structure will take effect for those taxes due in September 2013. What the tax rate will be in each county will depend on the county board of supervisors’ decision when creating the budget in the spring.
Washington County Auditor Dan Widmer said the Iowa Department of Revenue uses a complex formula to decide the amount of “rollback” every year.
Residential property has not been taxed this highly in Iowa since 2000, when the taxable value was 56 percent. However, the percent of value the state has allowed to be taxed has been going down over time.
The percentage was in the mid- to high-60s during the early 1980s before it spiked at about 81 percent in 1988. By the mid-1990s, the figure had fallen to the mid 50s and continued to fall throughout the first decade of the new millennium, reaching a low of 44 percent in 2007. Since then, it has increased about 4 percent per year.
Agricultural property was taxed at or near 100 percent from the late 1970s until 2007, when the percentage fell to 90 percent. The percentage has fallen every year since then with the exception of this most recent increase from 57.5 to 59.9 percent.
Commercial, industrial, utility and railroad properties have been taxed at or near 100 percent for the past 35 years.