Allamakee County Assessor’s Office explains sizable increase in valuation local property owners may have recently received
by Dwight Jones
For those who own property in Allamakee County and recently received an assessment roll in the mail from the Allamakee County Assessor’s Office showing an updated valuation, there’s a very good chance that assessment went up, many at a far higher percentage than what has been experienced in previous years.
This has undoubtedly been a hot topic of conversation around dinner tables and over social media, but what prompted the increases? Allamakee County Auditor Ann Burckart was recently interviewed to try and help understand why this has happened.
According to Iowa Code, assessments are to be at 100% of market value. Burckart explained that every other year within the State of Iowa, Iowa Code Section 441.21 mandates a process called “equalization” wherein property assessments are required to be adjusted, up or down, to be within 95%-105% of what is determined to be “fair market value”.
These values are calculated by comparing the sale price of similar properties from the area (a particular town, rural, riverfront, etc…) during the past two-year period to the assessed valuation. Only transactions considered “normal”, meaning a standard sale between buyers and sellers, are used. Such circumstances as sales between family members, etc. are not included in the calculations as they would unfairly skew the numbers.
And as most have likely noticed, for the past couple of years, property values basically across the board have gone up in the local area. As properties continue to sell for above assessed value, the “fair market value” described above continues to climb and thus an equalization is required to get those assessed valuation numbers within the State-mandated percentages stated above.
It should also be noted that the Assessor’s Office was provided an updated Real Estate Property Manual by the State of Iowa which provided additional direction on how valuations of properties are to be determined. These changes were not optional and the 2023 assessments are the first that Allamakee County has utilized the new manual.
BELOW FAIR MARKET VALUE
With all that said, Burckart shared that countywide residential assessments were recently tabulated at 75.54% of fair market value, and on average were increased 34% to meet the statutory requirements of Iowa Code.
Commercial properties use a similar (but not exactly the same) process, and after reviewing sales and appraisals by the Iowa Department of Revenue, assessments were determined to be at 73.41% of fair market value and on average were increased 40% to get them in-line with the requirements of Iowa Code.
Ag land uses a different process as well, using a productivity formula that looks at many variables over a five-year average. Thus, agricultural classified properties were increased 21% on average for 2023 to meet Iowa Code.
ROLLBACKS
If there is a light at the end of this tunnel, it could be the Iowa assessment limitation or rollback, which is an adjustment the State uses limiting increases in the aggregate taxable value of all classifications of property. The rollback limits how much a property’s taxable value can rise in a given year. Counties have not yet been provided the updated rollback number at this point, and it currently stands at 54.65% on residential classed property, but in a nutshell this variable, along with any changes to levies, could mean that even though property assessments may have gone up 30%, that doesn’t necessarily mean that tax payments will go up that same amount. In fact, they very likely will not.
QUESTIONS CAN BE ANSWERED
Burckart stated that her office is always available to help answer questions or concerns the public may have. Within her office are maps that show the properties that were used to determine the above mentioned trends. They show location, sales date, amount sold for, the amount a property was assessed for at time of sale and sales ratios that were used throughout the equalization process.
It should be noted that these “equalization adjustments” do not always equate to an increase in valuations. Should the real estate market settle down and properties begin to sell below assessed value, valuations could take a swing in the other direction during a future adjustment process.
