Are real estate taxes appealable?

Real estate taxes are assessed based on the determination of the real estate's value as determined by the county and/or city assessor. The assessor's valuation of the real estate is subject to appeal by the owner. The assessed value of any real estate may be appealed.. 

When can real estate taxes be appealed?

Real estate tax appeals are normally based on a challenge to the assessed value of the subject real estate. In Iowa, real estate is assessed on "odd numbered" years. A challenge must be filed with the Board of Review by May 5^th of the year of assessment.

On what grounds may real estate taxes be appealed?

Although the law provides several "grounds" for challenge to the assessor's valuation of real estate, the most common challenges are based on assertions that the real estate assessment is "more than allowed by law" or is not "equitable."

·         More than Allowed by Law.

The law provides that real estate shall be valued at its "fair market value" which is defined as the amount at which a willing buyer would sell, and a willing seller would buy, both with full knowledge of the facts of the transaction, and neither acting under duress.

Hence, if the real estate is assessed at an amount which exceeds of the real estate's "fair market value", it is assessed for "more than allowed by law".

In cases where the challenge is based on the owner's assertion that the real estate is valued for more than allowed by law, the owner must state the amount of the over assessment and the amount which the owner considers to be the actual value/fair market value of the real estate.

·         Inequitable Assessment.

The assessor's valuation may be successfully challenged if the assessment is "not equitable as compared with assessments of other like real estate in the taxing district." When this ground is relied upon, the legal descriptions and assessments of a "representative" number of comparable properties (there is no statutorily prescribed number), must be stated or the challenge will not be considered on this ground.

·         Other Grounds.

Although an owner of real estate may challenge the assessed value on other statutorily prescribed grounds (such as error of fraud in the assessment, a casualty resulting in the significant loss of use of the property) these are extremely case specific.

The process for appealing real estate taxes: 

A property owner who disagrees with the assessor's valuation of their property must file a written Petition to the Board of Review (by the date indicated on the notice of valuation). On the Petition, the owner must specify the particular grounds for appeal. To be successful, the owner of the real estate need only prevail on one ground. A Petition to the Board of Review may be available for download form the applicable County's website.

An owner appealing based on inequitable assessment or assessment for more than allowed by law (fair market value) should attach assessment and/or sales of comparable properties to the Petition. If the appeal is for income producing (commercial) property, there should be an attachment of a rent roll as well as an income statement. 

Upon receipt of a Petition, the Board of Review schedules a brief hearing to hear the real estate owner's argument as to the value. The Board of Review then provides its determination of the value of the real estate (which can be less, the same or MORE than the assessor's value).  If the owner of the real estate is dissatisfied with the determination by the Board of Review, appeal of Board of Review's action is made to the District Court in the County in which the real estate is located.

At the District Court level, the burden of proof is initially on the real estate's owner to show that the valuation as determined by the Board of Review is inappropriate. However, if two independent appraisers determine a value which is lower than the Board of Review's, then the burden of proof is shifted to the County.

Independent property tax representatives may assist owners of commercial property (apartments, retail centers, office buildings and hotels) by: determining a fair value of the property, filing the initial appeal with the Board of Review, representing the property owner in the hearing before the Board of Review, and coordinating litigation.