News Regarding Multi-Residential Property

April 02, 2015

News from the Iowa State Association of Counties: FOR IMMEDIATE RELEASE 5500 Westown Parkway, Suite 190, West Des Moines, IA 50266 April 2, 2015 Contacts: Rachel Bennett, ISAC Communications and Marketing Manager, 515.244.7181 Lucas Beenken, ISAC Public Policy Specialist, 515.244.7181 Bill Peterson, ISAC Executive Director, 515.244.7181 Supportive video titled “Multi-Residential Property | Iowa State Association of Counties” (2:17): Manageable Solutions for Multi-Residential Property West Des Moines, IA – With the passage of SF 295 in 2013 a new classification of property called multi-residential was created. The new class includes apartment complexes, assisted living facilities, mobile home parks, and other similar properties. These properties will benefit from a legislatively imposed rollback and an eventual coupling with the residential class rollback, but local governments will see a 40-50% reduction in the taxable valuation of multi-residential property over the next eight years. “Legislatively manipulating the taxable value of property with no backfill to local governments for the reduction in future revenue creates an unfunded mandate,” said Melvyn Houser, ISAC President and Pottawattamie County Supervisor, “The loss of taxable value coupled with rising costs forces counties to either raise tax rates or reduce services.” The Iowa State Association of Counties (ISAC) is committed to working with the Legislature to address unfunded and underfunded mandates that cause a tax burden shift. In an additional effort to counteract the loss of taxable value, ISAC is working to increase the proportion of user fees retained by counties when performing services of the state so these services do not have to be subsidized by property tax dollars. In addition to the fiscal impact, ISAC has concerns with the administrative rules addressing the assessment of multiple use properties. Under the adopted rules assessors will be charged with determining the primary use of the property as a whole if it has multiple uses, such as a multi-residential component and a commercial component. The primary use will determine if the property as a whole will be classed and taxed as multi-residential or if it will have a dual classification. “Requiring the assessors to determine primary use with no definitive guidelines when there are clearly multiple components that should be classed differently will create inconsistencies and inequities in the classification and taxation of these properties,” said ISAC Public Policy Specialist Lucas Beenken. ISAC supports a simple legislative fix that would allow for dual classification, regardless of primary use, so each portion of a multiple use property could be classified and taxed based on its own use. This approach ensures businesses are on an equal playing field and everyone is paying their fair share of property taxes. For more information please visit ISAC's website at or contact us directly

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