Assessed Value – The full value of a property primarily determined by its market value (except for agricultural property, which is assessed on productivity and earning capacity). All property is assessed every two years, except railroads and public utilities, which are assessed each year.
Assessment Limitation – Element of property tax system that limits taxable valuation growth, often referred to as the “rollback” (see also Rollback).
Assessment Appeals – Property owners may appeal assessments to local boards of review between April 16 and May 5 of each year.
Backfill – Also referred to as Replacement Claims, this is the term used to describe funding from the state government to replace reduced revenues due to legislative action. Currently, cities receive a backfill as appropriated by the state legislature to replace revenues for taxable valuation rollbacks to commercial and industrial properties; this backfill is capped at the FY 2017 appropriation level.
Budget/Tax Hearings – Beginning with budget fiscal year 2021, cities will be required to conduct two separate budget hearing processes. The first will be to approve a resolution of the Maximum Property Taxes to Certify for Levy, a new process established during the 2019 legislative session. The second will be to approve a resolution to approve the city budget. See SF634
Business Property Tax Credit – Created in 2013, this is a tax credit business property owners can apply for through the county or city assessor’s office.
Capital Projects Levy – Property tax levy that may be used to help pay for capital projects and improvements. The levy must be approved by voters at an election.
Consolidated Tax Rate – The total tax rate that a property owner pays for levies established by all taxing authorities. Common taxing authorities include cities, counties, schools, townships and hospitals.
Coupling – Common term used to describe the requirement in the assessment limitation system to tie agricultural and residential property valuation growth so that if one grows by less than 3 percent, the other must be rolled back to meet the lower amount.
Debt Limit – Also referred to as Debt Capacity or General Obligation Debt Capacity, this is the amount of debt that can be incurred by the city. The limit is 5 percent of a city’s assessed value. Revenue bonds or notes to be repaid with user fees do not count as debt for this calculation.
Debt Service Levy – Specific property tax levy cities may use to support debt service expenditures.
Equalization – Process used by the state every two years that reviews property assessments and sales assessment ratio studies. If assessments in a property class are 5 percent more or less than the sales ratio study, the state increases or decreases assessments to help maintain equitable assessments across property classes.
Exempt Property – Property that is exempt from property taxes. Examples include property owned by governmental entities, educational institutions, and religious, charitable or benevolent associations.
Non-Voted Levies – Property tax levies that a city may choose to use. There are currently nine such levies, each restricted to a specific purpose or expenditure.
Property Assessment Appeal Board – State agency that reviews property assessment appeal decisions made by local boards of review and hears protests from property owners.
Property Classes– There are currently five classes of property: agricultural, commercial, industrial, residential and utilities/railroad. A sixth, multi-residential, was added in Assessment Year 2015, first affecting city budgets in FY2017.
Property Tax Levies – Under state law, local governments and other taxing authorities have the authority to certify taxes to be levied and collected by the county government. Levy rates are expressed in dollars and cents per $1,000 of taxable property valuation. City governments are required to submit their property tax levies, along with their budget, to the county assessor and state government by March 15 of each year.
Rollback – Common term to describe element of property tax system that limits taxable valuation growth. Currently, agricultural and residential taxable valuations cannot grow by more than 3 percent. They are also tied together so that if one grows by less than 3 percent, the other must be rolled back to meet the lower amount. Commercial, industrial and railroad property will have a rollback of 95 percent in FY2015 and 90 percent in FY2016 and thereafter. Multi-residential property will have an eight year incremental rollback schedule, starting at 86.25 percent before eventually falling to the residential amount at the end of its schedule.
SF295 – Short for Senate File 295, the bill approved during the 2013 legislative session that included significant changes to Iowa’s property tax system.
SF634 – Short for Senate File 634, the bill approved during the 2019 legislative session that included significant changes to Iowa’s property tax system.
Special Revenue Levies – Property tax levies that may be used to help pay for specific purposes, such as employee benefits and retirement programs.
Tax Credits – Certain types of properties are eligible to receive money or a tax exemption if the property owner applies for the tax credit, which typically must be done by July 1. Common credits concerning city governments include the Homestead Credit and Military Exemption.
Tax Abatement – Temporary reductions of property taxes for a specific period of time on a portion of assessed property value. Cities often establish requirements for tax abatements, such as new construction or improvements to existing structures.
Tax Rebates – Qualifying property owners pay any property taxes owed and then receive rebates from the local government. Cities typically restrict these programs to certain types of properties and a specific period of time.
Taxable Value – The portion of a property’s valuation that is subject to property taxes.
The $8.10 – Common term used to describe the general fund property tax levy cities are allowed to use under state law, which permits cities to impose a levy rate up to $8.10 per $1,000 of taxable value.
Voted Levies – Property tax levies that a city may use only if approved by voters at an election. There are currently 11 such levies, each restricted to a specific purpose or expenditure.
