Driven by decreases in crop income, the assessed value of agricultural land in Hancock County is experiencing a steep decline. Neighboring counties are also seeing the assessed value of agricultural land fall.
A recent statewide report concluded that the assessed value of farmland and outbuildings, such as sheds and machine shops, declined by 28 percent in 2019 compared to the previous year.
The new assessments are calculated by “using a five-year average” to gauge the “productivity value” of farmland. “Productivity values” are separate from “market values” for farmland.
The study utilizes productivity values from 2013 through 2017 to conclude that the average acre of Hancock County farmland has a productivity value of $1,457 per acre.
However, declining assessments will not lead to tax relief for farmers. The report anticipates a 2 percent taxable value increase for farmers in Hancock County, who will pay taxes related to these updated values in September 2020.
The disparity between assessment and taxes is due in large part to a tool known as “the rollback.” The rollback was created in the 1970s at a time when farmland values were skyrocketing. At the time, it was intended to place a limit on the government’s ability to tax rapidly inflating farmland values. Since the rollback has been in place, it has lent stability to farmland taxes but ensured that they often don’t correlate with changes in income.
The complexity of the calculation still causes confusion among some farmers, which is why Welsch believes it is important to let farmers know about the updated assessments sooner rather than later.
I think it is important for them to know what to expect a year and a half from now. I don’t want them to be under the impression that taxes are going to drop by 28 percent because their assessed values are going down. I want to give them the whole picture rather than just a part of it.
The Iowa Department of Revenue has not yet released its farmland assessments and called the late arrival of the information “unprecedented.” As a result, many assessors are utilizing a report compiled by Stan Moellers, a senior field manager with Cedar Rapids-based Vanguard Appraisals.
Market valued property
The remaining property classes are Residential, Commercial, Industrial and Multi Residential. These classes are assessed at 100 percent of market value. All real property is revalued in odd numbered years per the Code of Iowa and is subject to an equalization order issued by the Department of Revenue if the assessments are not in compliance with established guidelines. 2019 is an equalization year. According to our market analysis, the following overall increases were applied: Residential 8.07 percent, Commercial 8.10 percent, Industrial 1.31 percent, Multi-Residential 6.45 percent.
Individual properties will have different increases or decreases according to a variety of situations such as changes in condition, new construction and buildings removed.
If you believe your property wouldn’t sell for the assessed value, there is a period of informal review from April 2 to April 25. Contact the Assessor’s office at 641-923-2269 or stop by our office at the Courthouse. You may protest your assessment with the Board of Review from April 2 to April 30. Since Hancock County was declared a Federal Disaster area, the protest period has been extended to June 5.