Ames homeowners see a nearly 30% average hike on property tax assessments
Ames homeowners opened their mail this weekend to find their property assessments rose an average of 29.5%.
The double-digit increase was for single-family homeowners and condo owners. It was far more than the most recent average changes in residential assessments, including 5.7% in 2021 and 1.5% in 2019, according to data from the Ames city assessor.
But categories across the board also saw an increase this year, according to the assessor's office, including:
Agricultural — 40%
Multi-family residential — 9.3%
Commercial — 14.5%
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Why did my Ames property tax assessment go up?
Conducted in odd years, the assessments are part of the data used to calculate a property owner's tax bill for the following two years, with the first bill due September 2024. The new assessments were mailed to all 21,129 properties in Ames on Friday, according to a news release from Ames City Assessor Shari Plagge.
They're based on sale prices, appraisals, home improvements and the overall state of the market. The assessed value reflects what is the most likely price a property owner would receive in a sale.
Ames has been in a seller's market for at least the last year, according to Rocket Homes, a division of the online mortgage lender Rocket Mortgage, which means there are more buyers than sellers and homes tend to sell quickly and for higher prices. The median sale price in March was $272,333, up nearly 7% from the same time last year, it said.
The 640 property sales in Ames last year sold for 25% to 30% more than their assessed value, Plagge said in the release.
"Factors contributing to property price increase (translating into higher assessed property valuations) include lower mortgage interest rates; higher construction costs; individuals moving to the Midwest from higher value market areas; and fewer homes listed for sale. While the number of property sales have recently slowed (due in part to the rise in mortgage interest rates), sale prices (thus property values) continue to increase," the letter sent to Ames property owners says.
Plagge said the increase "reflects statewide real estate trends."
The average assessment for homes in Polk County is likely to increase 22%, a record in the county whose seat is Des Moines. Commercial and industrial assessments in Polk County could see spikes of around 18%, Chief Deputy Assessor Bryon Tack told the Des Moines Register last year. In Dallas County, Assessor Steve Helm told the Register spikes of 13% to 17% are likely for residential property assessments, and as much as 17% to 20% for commercial properties.
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Does this mean I'll pay more on my property taxes?
It depends.
Cities, counties and school districts will set their budgets next spring based on the new assessments. Those taxing entities decide what their property tax levies will be for the year based on budgetary and revenue needs.
If property tax levies are lowered, it's possible a homeowner will pay less in taxes, despite the higher assessments. If the levies are raised or unchanged, the tax burden will be greater.
Iowa, too, will set its rollback rate — the portion of a home's valuation that's actually taxable — in the fall. The 2021 rollback was 54.13%, meaning the owner of a home valued at $100,000 pays taxes on $54,130 of it.
“Property values are just one of three variables in calculating your City of Ames property taxes. A percentage increase in your assessment does not mean you will experience the same percentage increase on your tax bill," Plagge said in the release.
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I disagree with the number. Can I protest my assessment?
Yes. If a property owner disagrees with the new assessment, there is a review and appeal process.
Property owners should contact the Ames City Assessor’s Office before April 25 for an informal review. Those who have questions or want to schedule a review should email at cityassessorinfo@cityofames.org, call 515-239-5370, or stop by in person on the second floor of City Hall, 515 Clark Ave.
“We are here to help residents with concerns or questions about these new assessments, so please contact us prior to the deadline,” Plagge said. “If people wait until the deadline has passed, we are very limited in what we can provide.”
More information can be found online at www.cityofames.org/government/departments-divisions-a-h/city-assessor.
This article originally appeared on Ames Tribune: Why Ames property tax assessments went up and how to appeal
