The Iowa Department of Revenue (IDR) has issued the annual Assessment Limitations Order, or “rollback,” on property values. These adjustments are the percentage of property valuation within each property class that is subject to taxation necessary to comply with state law. The Fiscal Year (FY) 2023 rollback numbers can be seen below:
| Property Class | FY 2023 Rollback Percentage |
|---|---|
| Agricultural | 89.0412% |
| Commercial | 90% |
| Industrial | 90% |
| Railroad | 90% |
| Residential | 54.1302% |
| Multi-Residential | Class eliminated for assessments after Jan 1, 2022 |
Legislation adopted in 2013 and 2021 overhauled the property tax system. Previously, state law allowed no more than a 4% increase from year to year in the taxable values for agricultural, residential, commercial and industrial property classifications. Effective with the 2013 assessment limitation order, the increase in taxable values for the agricultural and residential property classifications was limited to 3%. Additionally, the assessment limitation for commercial, industrial and railroad properties is fixed at 10%. The Multi-Residential property class continues on its 8-year rollback schedule with another drop.
The 2021 property tax bill will phase out the state’s “backfill” payments to local governments to offset revenue reductions stemming from the commercial/industrial rollback, while the Multi-Residential property class will be eliminated and such properties will transfer to the residential property class.
County auditors will apply the adjustments to each property class to calculate the taxable values used for property taxes. Tax liabilities, based on 2021 taxable values and payable in Fiscal Years 2022 and 2023, will not be determined until early next year when local taxing bodies establish their property tax needs.
More information will be available in the League’s annual Budget Special Report, to be released soon, containing a variety of helpful budget and finance information. Analysis of this information and much more will be provided at the 2021 Budget Workshops.
