Introduction to Property Tax

Property taxes are not determined by a single individual who assesses your property and sends you a bill. The final tax rate is the result of budgets established to provide services, an assessor’s assessment, a county auditor’s calculations, and laws administered by the Iowa Department of Revenue.

Because property assessment involves a series of events that takes 18 months from start to finish, this information will not be able to answer all your questions. It should, however, be able to explain the basic principles and events involved in calculating the property tax rate.

Iowa Property Tax
The Iowa property tax is primarily a tax on "real property," which is mostly land, buildings, structures, and other improvements that are constructed on or in the land, attached to the land, or placed upon a foundation. Typical improvements include a building, house, mobile home, fences, and paving.

The following five classes of real property are evaluated:
  • Agricultural
  • Commercial
  • Industrial
  • Residential
  • Utilities / Railroad (This class is assessed at the state level)

Who Pay Property Tax pie chart
Who Pays Property Tax
Home owners pay almost 43% of the property tax collected each year in Iowa. Farmers pay more than 22%, and businesses and industry more than 31%. Utility companies, including railroads, pay more than 3%.

Property Assessment Frequency
All real property is assessed every two years in odd-numbered years. Railroads and public utilities are assessed every year by the Iowa Department of Revenue.

Taxing Authorities
Property tax supports many different "taxing authorities." Cities, counties, school districts, and townships are the most common. Taxing authorities may also include community college districts, agricultural extension districts, assessor offices, hospital districts, and sanitation districts. In addition, there are associations for fire protection, drainage, and other public needs that levy taxes.

Iowa has more than 2,000 taxing authorities. Most property is taxed by more than one taxing authority.