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Iowa Department of Revenue Releases Farm Productivity Values

Iowa Farm Productivity Values

Like all real estate it must be assessed from time to time to determine its value for tax purposes.  The Iowa Department of Revenue has released new figures for 2017 showing a decline of 10.6% or $1926 per acre in the 5 year moving average calculation.  While the average statewide fell not all counties in the state saw a decrease.  Clarke County had the largest increase moving up 8.5% and Montgomery County Iowa farmland was set back 20.9%

The calculation is based on both income and expenses for the individual counties.  Revenue from crops and government programs and expenses from crop inputs and management, operating costs and taxes are all used in the calculation and calculated against the total number of agricultural acres in that county to determine the value of all ag land in a particular county.

These new assessments are communicated to the landowner by each assessor and will be implemented fully by the Spring of 2019 for tax calculations.  With large increases in 2007, 2009, 2011 and 2013 over 20% a significant rollback was created which keep taxable valuation limited to a 3% increase.

taxes on iowa farmland

If you were hoping that all meant lower taxes according to the Iowa Department of Revenue “Taxable valuation at the state level will be released from the rollback for 2017 and ag land across the state will be assessed on approximately 55% of its productivity value. Because the rollback is released, taxable valuations will increase in many counties even if the actual productivity value in the county declined. This occurs when the rollback is released to allow the entire class of agricultural property in the state to grow at 3 percent. The dashed line will continue to increase 3% every year until it meets the solid line at some point in the future. When those lines meet, the rollback will be eliminated and ag land will be taxed on its full productivity value. History shows that most years’ ag land has been taxed at its full value, but the large increases since 2005 have created the rollback and may take a few years to remove. Taxable valuations after the rollback are higher than the changes in the productivity values. This is because of the rollback that is released to obtain a 3% growth in ag taxable values across the state. Ten counties had significant enough declines (over 16%) in their productivity values that the taxable values will still be lower. On the other side of the ledger eight counties who had their productivity values increase will see taxable valuations increase 20% or more on agricultural land as a whole in the county.

Counties with significant increases in taxable valuation will have to make sure to adjust their levy rates and only capture the valuation they need for services, and not put an excess of taxpayer’s money into reserves or used for unneeded expenditures.”

farmland taxes in iowa

County 2015
Productivity
Value
2017
Productivity
Value
Percentage
Change
2015
Taxable
Value
2017
Taxable
Value
Percentage
Change
ADAIR $1,708 $1,502 -12.1% $788 $822 4.3%
ADAMS $1,602 $1,436 -10.4% $739 $785 6.2%
ALLAMAKEE $1,667 $1,526 -8.5% $769 $834 8.5%
APPANOOSE $660 $668 1.2% $304 $365 20.1%
AUDUBON $2,016 $1,817 -9.9% $929 $994 7.0%
BENTON $2,581 $2,221 -13.9% $1,190 $1,215 2.1%
BLACK HAWK $2,477 $2,131 -14.0% $1,142 $1,166 2.1%
BOONE $2,199 $1,984 -9.8% $1,014 $1,085 7.0%
BREMER $2,547 $2,094 -17.8% $1,174 $1,145 -2.5%
BUCHANAN $2,325 $2,104 -9.5% $1,072 $1,151 7.4%
BUENA VISTA $2,422 $2,092 -13.6% $1,117 $1,144 2.4%
BUTLER $2,269 $1,928 -15.0% $1,046 $1,054 0.8%
CALHOUN $2,123 $1,956 -7.9% $979 $1,070 9.3%
CARROLL $2,285 $2,033 -11.0% $1,054 $1,112 5.5%
CASS $2,167 $1,939 -10.5% $999 $1,060 6.1%
CEDAR $2,675 $2,408 -10.0% $1,234 $1,317 6.7%
CERRO GORDO $2,141 $1,901 -11.2% $987 $1,039 5.3%
CHEROKEE $2,895 $2,413 -16.6% $1,335 $1,320 -1.1%
CHICKASAW $2,390 $2,110 -11.7% $1,102 $1,154 4.7%
CLARKE $774 $840 8.5% $357 $459 28.6%
CLAY $2,576 $2,292 -11.0% $1,188 $1,253 5.5%
CLAYTON $1,906 $1,758 -7.8% $879 $962 9.4%
CLINTON $2,629 $2,334 -11.2% $1,212 $1,276 5.3%
CRAWFORD $2,359 $2,048 -13.2% $1,088 $1,120 2.9%
DALLAS $1,978 $1,740 -12.0% $912 $951 4.3%
DAVIS $817 $867 6.1% $377 $474 25.7%
DECATUR $685 $661 -3.5% $316 $361 14.2%
DELAWARE $2,557 $2,160 -15.5% $1,179 $1,181 0.2%
DES MOINES $2,050 $1,958 -4.5% $945 $1,071 13.3%
DICKINSON $2,298 $2,075 -9.7% $1,060 $1,135 7.1%
DUBUQUE $2,203 $2,101 -4.6% $1,016 $1,149 13.1%
EMMET $2,375 $2,088 -12.1% $1,095 $1,142 4.3%
FAYETTE $2,276 $2,173 -4.5% $1,049 $1,188 13.3%
FLOYD $2,264 $1,937 -14.4% $1,044 $1,059 1.4%
FRANKLIN $2,454 $2,172 -11.5% $1,131 $1,188 5.0%
FREMONT $2,422 $1,939 -19.9% $1,117 $1,061 -5.0%
GREENE $2,154 $1,890 -12.3% $993 $1,034 4.1%
GRUNDY $2,729 $2,390 -12.4% $1,258 $1,307 3.9%
GUTHRIE $1,496 $1,374 -8.2% $690 $752 9.0%
HAMILTON $2,224 $2,023 -9.0% $1,025 $1,106 7.9%
HANCOCK $2,396 $2,040 -14.9% $1,105 $1,116 1.0%
HARDIN $2,364 $2,072 -12.4% $1,090 $1,133 3.9%
HARRISON $2,299 $1,896 -17.5% $1,060 $1,037 -2.2%
HENRY $1,652 $1,550 -6.2% $762 $848 11.3%
HOWARD $2,212 $1,896 -14.3% $1,020 $1,037 1.7%
HUMBOLDT $2,357 $2,158 -8.4% $1,087 $1,180 8.6%
IDA $2,625 $2,393 -8.8% $1,210 $1,309 8.2%
IOWA $1,997 $1,862 -6.8% $921 $1,018 10.5%
JACKSON $1,937 $1,897 -2.1% $893 $1,037 16.1%
JASPER $1,979 $1,953 -1.3% $913 $1,068 17.0%
JEFFERSON $1,632 $1,583 -3.0% $752 $866 15.2%
JOHNSON $1,953 $1,798 -7.9% $900 $983 9.2%
JONES $2,352 $2,059 -12.5% $1,085 $1,126 3.8%
KEOKUK $1,835 $1,810 -1.4% $846 $990 17.0%
KOSSUTH $2,590 $2,256 -12.9% $1,194 $1,234 3.4%
LEE $1,446 $1,359 -6.0% $667 $743 11.4%
LINN $2,363 $2,077 -12.1% $1,089 $1,136 4.3%
LOUISA $2,176 $2,235 2.7% $1,003 $1,222 21.8%
LUCAS $762 $798 4.7% $352 $436 23.9%
LYON $3,086 $2,475 -19.8% $1,423 $1,354 -4.8%
MADISON $1,229 $1,111 -9.6% $566 $608 7.4%
MAHASKA $2,279 $2,033 -10.8% $1,051 $1,112 5.8%
MARION $1,650 $1,521 -7.8% $761 $832 9.3%
MARSHALL $2,409 $2,216 -8.0% $1,111 $1,212 9.1%
MILLS $2,646 $2,218 -16.2% $1,220 $1,213 -0.6%
MITCHELL $2,234 $1,986 -11.1% $1,030 $1,086 5.4%
MONONA $2,213 $1,950 -11.9% $1,020 $1,067 4.6%
MONROE $680 $694 2.1% $314 $380 21.0%
MONTGOMERY $2,223 $1,759 -20.9% $1,025 $962 -6.1%
MUSCATINE $2,210 $2,033 -8.0% $1,019 $1,112 9.1%
OBRIEN $2,887 $2,606 -9.7% $1,331 $1,425 7.1%
OSCEOLA $2,718 $2,457 -9.6% $1,253 $1,344 7.3%
PAGE $2,048 $1,713 -16.4% $944 $937 -0.7%
PALO ALTO $2,475 $2,127 -14.1% $1,141 $1,163 1.9%
PLYMOUTH $2,476 $2,112 -14.7% $1,141 $1,155 1.2%
POCAHONTAS $2,528 $2,279 -9.8% $1,165 $1,247 7.0%
POLK $1,571 $1,535 -2.3% $724 $840 16.0%
POTTAWATTAMIE $2,589 $2,132 -17.7% $1,194 $1,166 -2.3%
POWESHIEK $2,312 $2,019 -12.7% $1,066 $1,104 3.6%
RINGGOLD $936 $925 -1.2% $432 $506 17.1%
SAC $2,323 $2,075 -10.7% $1,071 $1,135 6.0%
SCOTT $2,303 $2,235 -3.0% $1,062 $1,222 15.1%
SHELBY $2,545 $2,191 -13.9% $1,173 $1,198 2.1%
SIOUX $2,863 $2,492 -13.0% $1,320 $1,363 3.3%
STORY $2,123 $1,909 -10.1% $979 $1,044 6.6%
TAMA $2,130 $1,946 -8.6% $982 $1,064 8.4%
TAYLOR $1,355 $1,281 -5.5% $625 $701 12.2%
UNION $1,160 $1,039 -10.4% $535 $568 6.2%
VAN BUREN $1,044 $1,073 2.8% $481 $587 22.0%
WAPELLO $1,579 $1,444 -8.5% $728 $790 8.5%
WARREN $1,323 $1,244 -6.0% $610 $680 11.5%
WASHINGTON $1,938 $1,853 -4.4% $894 $1,013 13.3%
WAYNE $785 $849 8.2% $362 $464 28.2%
WEBSTER $2,098 $1,987 -5.3% $967 $1,087 12.4%
WINNEBAGO $2,273 $2,070 -8.9% $1,048 $1,132 8.0%
WINNESHIEK $2,384 $1,924 -19.3% $1,099 $1,052 -4.3%
WOODBURY $2,352 $2,160 -8.2% $1,085 $1,181 8.8%
WORTH $2,301 $2,059 -10.5% $1,061 $1,126 6.1%
WRIGHT $2,456 $2,149 -12.5% $1,133 $1,175 3.7%
State $2,153 $1,926 -10.5% $993 $1,053 6.0%

* The State Taxable Value increase is 6.1% because it is over a two year period

Farmland taxes in Iowa do and can affect farmland prices as a buyer does use that expense to calculate their return on farmland purchase and while many things can play into that decision that might offset or compound the effect of taxation levels it is an important part of the equation.  In addition to taxes some farms can also have government or drainage assessments that essentially have the same effect as taxation.

If you are considering buying or selling a farm in Iowa I would enjoy the opportunity to visit with you about your goals and suggest a path forward to help you be successful in your investing and sales goals.

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