Iowa Multi-Family Owners: Your Property Tax Bill Is Going Up – Here’s Why

By David Swartz, Business Development at Swartz and Associates

Property tax reform was a major goal to complete in Iowa and Governor Reynolds recently signed the changes into law.

Here are three points we think impact the commercial property owners we serve in Iowa.

1. How Revenue Caps Affect Cities, Counties, and Your Tax Levy

This bill impacts how cities and counties manage capped revenue on their general funds affecting budget planning, re-evaluating economic development incentives, and communicating the tax rates more effectively in keeping with these revenue caps. We only focus on a property’s assessed value and its comparability to similar properties – which was not affected by this legislation, but remains an integral part of how you can best manage the ultimate annual property tax liability paid once the levy has been set.

2. The Roll-Back Change: What Multi-Family Owners Can Expect to Pay

The “roll-back” mechanism used to adjust multi-family property valuations similarly to homes will now change and become 6% less advantageous by 2030. Prior to the legislation, a $3m multi-family property in Des Moines would have expected an approximate reduction in value to 44% of the 2026 property’s market value before taxes are applied. That similar property will only experience a roll-back calculation of approximately 47% in the subsequent year and a cap of 50% of the market value. This increase in the valuation on which the tax levy is assessed is shown below.

Example of how multi-family properties under roll-back changes

* Assumes no growth in property and no change in levy. Historically we see 9% growth in values and less than 2% change in levies.

3. Other Commercial Property Classes: What Stays the Same — and What to Watch

No changes were made for other commercial property values outside of the multi-family example referenced. We feel valuations for central business district office space and other B-grade space will remain a significant priority for our review. High interest rates will continue to impact cap rates used to value all other asset classes with retail and older warehouses drawing considerable interest.

Change is a constant in any business atmosphere, and our experience working with local jurisdictions across the country allows us to be nimble and creative. 2027 will be the next assessment year in Iowa when all the properties are reviewed for reassessment and the law’s effects will begin. This is a perfect time to start planning ahead for what impacts you might expect and how we can position you with proper strategies.

Swartz + Associates, Inc. (SAI) is a full service property tax firm specializing in the review, analysis and appeals of real and business personal property tax valuations. If you need help with your property taxes, give us a call!