The most obvious is that the property itself changes. A change in the square footage such as building a garage or new addition, the property is remodeled, part of the property is destroyed or removed, or there is a change in the tax classification.
The most frequent cause of a change in value is a change in the market. This change can be upward or downward. Some reasons for these changes might include a change in the town’s job market, housing supply, recession or inflation. Values change due to market influences in an area or subdivision, towns or tax classifications within the County and occur even if nothing at your individual property has changed.
The assessor estimates the market value only after researching sales and completing sales ratio studies which show market trends. An analysis of local conditions as well as economic trends both in and outside the construction industry are also used in determining property assessments. After properties have been appraised, the preliminary assessed values are analyzed to ensure that accurate and equitable values were established using the most recent selling prices.
The Iowa Department of Revenue is responsible for “equalizing” assessments every two years. Following is a general explanation of the purpose of equalization.
The Department compares the assessors' abstracts to a “sales assessment ratio study” it has completed independently of the assessors. If the assessment (by property class) is 5% or more above or below the sales ratio study, the Department increases or decreases the assessment. (There is no sales ratio study for agricultural and industrial property.)
Equalization occurs on an entire class of property, not on individual property. Also, equalization occurs on an assessing jurisdiction basis, not on a statewide basis.
Equalization is important because it helps maintain equitable assessments among classes of property and among assessing jurisdictions. This contributes to a more fair distribution of state aid, such as aid to schools. It also helps to equally distribute the total tax burden within the area.
A notice will be issued in each jurisdiction receiving an equalization order. The county auditor shall give notice on or before October 8 by publication in an official newspaper to any class of property affected by the equalization order, and the county auditor will also give notice by mail postmarked on or before October 8 to each property owner or taxpayer whose valuation has been increased by the equalization order.
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