Understanding Your Property Taxes

Property taxes and their uses can be confusing. The City often hears questions regarding property taxes and how they are calculated or why did my taxes go up, but the tax levy didn’t change. The City of Rock Valley put together this short article to help explain how they work and what they're used for.

A property tax formula is used to figure out property taxes for each property.

Property tax formula:

Example on residential property assessed at $200,000.

  • $200,000 assessed value x 56.4919% residential rollback = $112,983.90 taxable value
  • $112,983.90 taxable value/$1,000 = $112.98
  • $112.98 taxable value per $1,000 x $30.92193 consolidated tax levy = $3,493.68 property taxes

Assessed Value

Every property is given an assessed value by the County Assessor. To establish assessed value of your property, the Assessor will generally use several methodologies. The two most important considerations are finding comparable properties to yours which have sold recently and to estimate what it would cost at current labor and material prices to replace your property with one similar to it.

Taxable Value

The Code of Iowa provides for the reduction of property tax valuations according to assessment limitations to cushion the impact of inflation. The Iowa Department of Revenue computes assessment limitation percentages, and county auditors multiply the assessed valuations by them to determine taxable valuations.

  • Agricultural realty is multiplied by 91.6430% to determine taxable value.
  • Residential and multi-residential realty is multiplied by 56.4919% to determine taxable value.
  • Commercial and industrial realty is multiplied by 90.0000% to determine taxable value.

Setting the Levy

The county, city, school district and community college determine their own budgets and the levy’s they need to generate the necessary revenue. The rates for all authorities are added together, resulting in a single tax levy called a consolidated levy for each unique set of taxing districts.

In Sioux County we are fortunate that we have had prolonged growth in the assessed and taxable values which has allowed levies to remain stable. Over the past five years the City’s levy has remained stable while the consolidated levy has decreased by 8.3%.

How are Property Taxes Used?

For the City, property taxes help fund the police department, fire department, ambulance association, library, city hall, parks, recreation programs, swimming pool, street cleaning, roadway maintenance, street lights, elections, administration, legal services, debt service, property maintenance, economic development, mosquito spraying, storm sewer repairs, junk days and trail construction and maintenance.

Property taxes aren’t used to fund capital projects, water, sewer, garbage, or campground enterprises.