Business Property Tax Credit
Disabled Veteran’s Homestead Credit
Homestead Tax Credit
Family Farm Tax Credit
Forest & Fruit Tree Exemption
Military Service Tax Exemption
Native Prairie & Wildlife Habitat Exemption
Pollution Control Tax Exemption
Urban Revitalization/Renewal Tax Exemption
The Business Property Tax Credit (BPTC) is a credit against taxes based on valuation, for commercial, industrial, and railroad property. For BPTC applications received and approved by January 15, 2014, the credit will be applied to the 2013 assessment and therefore calculated as a credit on the Fall 2014 and Spring 2015 property tax statement. For all future years, the deadline for applying in the local assessor’s office is March 15th. *HF 616 passed in 2015 changed the filing date starting with the 2016 Assessment year and thereafter to July 1st of the same year.
Property owners may claim and receive one credit for each eligible parcel unless the parcel is a part of a property unit for which a credit is claimed. A property unit is defined in the law as “contiguous parcels all of which are located within the same county, with the same property tax classification, are owned by the same person, and operated by that person for a common use and purpose.” Eligible parcels, or property units, must be classified and taxed as commercial, industrial, or railroad property.
The law excluded properties which will be reclassified to the new multi-residential classification in 2015. These property types include: mobile home parks, manufactured home communities, land-leased communities, assisted living facilities (as defined in section 441.21, subsection 13, enacted in this law), and any property primarily used or intended for human habitation containing three or more separate dwelling units. Therefore, apartment buildings, dwellings converted to 3 or more apartments, and Section 42 Housing are excluded. Also excluded, are residential and agricultural properties that may have home businesses or are rental properties.
Iowa residents who are an owner of a homestead property, and meet one of the following eligibility criteria are eligible for this credit which is equal to 100% of the actual tax levy.
1a. A veteran of any of the military forces of the United States, who acquired the homestead under 38 U.S.C. §21.801, 21.802, or 38 U.S.C. §2101, 2102.
1b. A veteran as defined in Section 35.1 with a permanent service-connected disability rating of 100%, or a permanent and total disability rating based on individual unemployability that is compensated at the 100% disability rate.
1c. A former member of the National Guard of any state who otherwise meets the service requirements of Iowa Code section 35.1, subsection 2, paragraph “b”, subsection (2) or (7), with a permanent service-connected disability rating of 100%, or a permanent and total disability rating based on individual unemployability that is compensated at the 100% disability rate.
1d. An individual who is a surviving spouse or a child who is receiving dependency and indemnity compensation (DIC) pursuant to 38 U.S.C. §1301 et seg.
To get this credit, the applicant needs to file an application with the Assessor on or before July 1 of the year the credit is first claimed, along with a DD214 and a current Benefits Paid letter issued within 12 months of the application date. Once the application is approved, reapplication for successive years is not required as long as the property is owned by someone who falls under one of the four categories of ‘owner’ listed in Iowa Code section 425.15, and used as a homestead by that person on July 1 of each of those successive years.
A surviving spouse of a veteran receiving the disabled veteran homestead tax credit also continues to receive the credit, as long as the spouse lives in the homestead and does not remarry.
Written notification must be provided to the assessor if the circumstances change which would result in a taxpayer being ineligible for the credit, or conveyance of this property, or its discontinued use as your homestead.
The Veteran who qualifies for the Disabled Veteran Homestead Tax Credit may not claim a military service tax exemption on any property located in Iowa.
Any property owner in the State of Iowa who lives in the property can receive a homestead tax credit. To be eligible, a homeowner must occupy the homestead any six months out of the year, but must reside there on July 1.
This exemption is a reduction of the taxable value of their property amounting to a maximum $4,850 or the amount which does not allow the taxable value to be less than zero.
Disabled veterans are allowed to claim a homestead credit that would be equal to the entire amount of taxes levied on the homestead property. The exemption is not allowed if the combined income of the veteran and their spouse, if any, exceeds $35,000 in the prior income tax year. Income means taxable income for federal income tax purposes plus income from any political subdivision exempt from federal income tax. See Code of Iowa Chapter 425.
This credit is available to all farm operators who own and operate farm land, or farm land owned by a family member such as parents, children, grandparents, grandchildren, brother, sister, aunt, uncle, niece, nephew. Cousins do not qualify.
This credit must be applied for annually by November 1 of the current year. this is a permanent sign up unless any of the following changes occur:
- Ownership changes
- Purchase of additional land
- Designated person changes
Contact the Assessor’s office for more information on the complexities of this law. See Code of Iowa Chapter 425A.
Any person who establishes a forest or fruit-tree reservation as provided in Iowa Code Chapter 427C shall be entitled to the tax exemption as provided by law.
Any property owner who has been involved in full-time active duty during a war or conflict, has been honorably discharged and lives in Iowa qualifies for a military exemption. The applicable times of either a war or conflict are spelled out in Section 427.3 of the Code of Iowa. Though the wars date back to 1846, the ones generally in use now are for World War I through the Viet Nam Conflict. The amount of the exemption in taxable value for the most often used exemptions is $2,778 for WWI and $1,852 for any others after that.
It is the responsibility of each person who qualifies for and wishes to receive a military exemption, to make application with the city or county assessor and also have their discharge papers (DD214) recorded in the appropriate county. Application is to be made prior to July 1 of the claim year.
National guardsmen and reserves are not eligible for the exemption if their only active duty was for training purposes. On some rare occasions there were guardsmen and reserves who were called into active duty other than training. In these cases the person is eligible for the exemption. See Code of Iowa Chapter 426A.
|War||Service Must Have Been Between Following Dates||Amount Of Exemption|
|World War I||Declared April 6, 1917
Terminated November 11, 1918
|World War II||Declared December 7, 1941
Terminated December 31, 1946
|Korean Conflict||Declared June 25, 1950
Terminated January 31, 1955
|Lebanon or Grenada||Declared August 24, 1982
Terminated July 31, 1984
|Panama||Declared December 20, 1989
Terminated January 31, 1990
|Viet Nam Conflict||Declared February 28, 1961
Terminated May 7, 1975
Members of the reserve forces and members of the Iowa national guard who served at least 20 years after January 28, 1973.
|Declared August 2, 1990
Terminated January 31, 1990
Additions to Eligibilty (per House File 374
- Former members of the armed forces of the United States who performed at least 3 years of military service, regardless of the time period, and who were honorably discharged are eligible.
- Former members of the United States reserves and Iowa national guard who completed at least 20 years of military service and were honorably discharged are eligible.
- Current members of the United States reserves and Iowa national guard who have completed at least 20 years of military service are eligible.
Pollution control and recycling. Pollution-control or recycling property as defined in this subsection shall be exempt from taxation to the extent provided in this subsection, upon compliance with the provisions of this subsection.
This exemption shall apply to new installations of pollution-control or recycling property beginning on January 1 after the construction or installation of the property is completed. This exemption shall apply beginning on January 1, 1975, to existing pollution-control property if its construction or installation was completed after September 23, 1970, and this exemption shall apply beginning January 1, 1994, to recycling property.
This exemption shall be limited to the market value, as defined in section 441.21, of the pollution-control or recycling property. If the pollution-control or recycling property is assessed with the other property as a unit, this exemption shall be limited to the net market value added by the pollution-control or recycling property, determined as of the assessment date.
Application for this exemption shall be filed with the assessing authority not later than the first of February of the first year for which the exemption is requested, on forms provided by the department of revenue and finance. The application shall describe and locate the specific pollution-control or recycling property to be exempted.
The application for a specific pollution-control or recycling property shall be accompanied by a certificate of the administrator of the environmental protection division of the department of natural resources certifying that the primary use of the pollution-control property is to control or abate pollution of any air or water of this state or to enhance the quality of any air or water of this state or, if the property is recycling property, that the primary use of the property is for recycling.
A taxpayer may seek judicial review of a determination of the administrator of the environmental protection division or, on appeal, of the environmental protection commission in accordance with the provisions of chapter 17A.
The environmental protection commission of the department of natural resources shall adopt rules relating to certification under this subsection and information to be submitted for evaluating pollution-control or recycling property for which a certificate is requested. The department of revenue and finance shall adopt any rules necessary to implement this subsection, including rules on identification and valuation of pollution-control or recycling property. All rules adopted shall be subject to the provisions of chapter 17A.
For the purposes of this subsection “pollution-control property” means personal property or improvements to real property, or any portion thereof, used primarily to control or abate pollution of any air or water of this state or used primarily to enhance the quality of any air or water of this state and “recycling property” means personal property or improvements to real property or any portion of the property, used primarily in the manufacturing process and resulting directly in the conversion of waste plastic, wastepaper products, or waste paperboard, into new raw materials or products composed primarily of recycled material. In the event such property shall also serve other purposes or uses of productive benefit to the owner of the property, only such portion of the assessed valuation thereof as may reasonably be calculated to be necessary for and devoted to the control or abatement of pollution, to the enhancement of the quality of the air or water of this state, or for recycling shall be exempt from taxation under this subsection.
For the purposes of this subsection “pollution” means air pollution as defined in section 455B.131 or water pollution as defined in section 455B.171. “Water of the state” means the water of the state as defined in section 455B.171. “Enhance the quality” means to diminish the level of pollutants below the air or water quality standards established by the environmental protection commission of the department of natural resources. See Code of Iowa Chapter 427.
On any tract of land in the State of Iowa, the owner or owners may select a permanent forest reservation or reservations, each not less than two acres in continuous area, or a fruit-tree reservation or reservations, not less than one nor more than ten acres in total area, or both, and upon compliance with the provisions of this chapter, such owner or owners shall be entitled to the benefits provided by law.
FOREST RESERVATION: A forest reservation shall contain not less than two hundred growing forest trees on each acre. If the area selected is a forest containing the required number of growing forest trees, it shall be accepted as a forest reservation under this chapter provided application is made or on file on or before February 1of the exemption year. If any buildings are standing on an area selected as a forest reservation under this section or a fruit-tree reservation under section 427C.7 one acre of that area shall be excluded from the tax exemption. However, the exclusion of that acre shall not affect the area’s meeting the acreage requirement of section 427C.2.
REMOVAL OF TREES: Not more than one-fifth of the total number of trees in any forest reservation may be removed in any one year, excepting in cases where the trees die naturally.
FOREST TREES: The ash, black cheer, black walnut, butternut, catalpa, coffee tree, the elms, hackberry, the hickories, honey locust, Norway and Carolina poplars, mulberry, the oaks, sugar maple, cottonwood, soft maple, osage orange, basswood, black locust, European larch and other coniferous trees, and all other forest trees introduced into the state for experimental purposes, shall be considered forest trees within the meaning of this chapter. In forest reservations which are artificial groves, the willows, box elder, and other poplars shall be included among forest trees for the purpose of this chapter when they are used as protecting borders not exceeding two rows in width around a forest reservation, or when they are used as nurse trees for forest trees in such forest reservation, the number of such nurse trees not to exceed one hundred on each acre; provided that only box elder shall be used as nurse trees.
GROVES: The trees of a forest reservation shall be in groves not less than four rods wide except when the trees are growing or are planted in or along a gully or ditch to control erosion in which case any width will qualify provided the area meets the size requirement of two acres.
FRUIT-TREE RESERVATION-DURATION OF EXEMPTION: A fruit-tree reservation shall contain on each acre, at least forty apple trees, or seventy other fruit trees, growing under proper care and annually pruned and sprayed. A reservation may be claimed as a fruit-tree reservation, under this chapter, for a period of eight years after planting provided application is made or on file on or before February 1 of the exemption year.
FRUIT TREES: The cultivated varieties of apples, crabs, plums, cherries, peaches, and pears shall be considered fruit trees within the meaning of this chapter.
REPLACING TREES: When any tree or trees on a fruit-tree or forest reservation shall be removed or die, the owner or owners of such reservation shall, within one year, plant and care for other fruit or forest trees, in order that the number of such trees may not fall below that required by this chapter.
RESTRAINT OF LIVESTOCK AND LIMITATION ON USE: Cattle, horses, mules, sheep, goats, ostriches, rheas, emus, and swine shall not be permitted upon a fruit-tree or forest reservation. Fruit-tree and forest reservations shall not be used for economic gain other than the gain from raising fruit or forest trees.
PENALTY: If the owner or owners of a fruit-tree or forest reservation violate any provision of this chapter within the two years preceding the making of an assessment, the assessor shall not list any tract belonging to such owner or owners, as a reservation within the meaning of this chapter, for the ensuing two years.
Application-Inspection-Continuation of Exemption-Recapture of Tax: It shall be the duty of the assessor to secure the facts relative to fruit-tree and forest reservations by taking the sworn statement, or affirmation, of the owner or owners making application under this chapter; and to make special report to the county auditor of all reservations made in the county under the provisions of this chapter.
The board of supervisors shall designate the county conservation board or the assessor who shall inspect the area for which an application is filed for a fruit-tree or forest reservation tax exemption before the application is accepted. Use of aerial photographs may be substituted for on-site inspection when appropriate. The application can only be accepted if it meets the criteria established by the natural resource commission to be a fruit-tree or forest reservation. Once the application has been accepted, the area shall continue to receive the tax exemption during each year in which the area is maintained as a fruit-tree or forest reservation without the owner having to refile. If the property is sold or transferred, the seller shall notify the buyer that all, or part of, the property is in fruit-tree or forest reservation and subject to the recapture tax provisions of this section. The tax exemption shall continue to be granted for the remainder of the eight-year period for fruit-tree reservation and for the following years for forest reservation or until the property no longer qualifies as a fruit-tree or forest reservation. The area may be inspected each year by the county conservation board or the assessor to determine if the area is maintained as a fruit-tree or forest reservation. If the area is not maintained or is used for economic gain other than as a fruit-tree reservation during any year of the eight-year exemption period and any year of the following five years or as a forest reservation during any year for which the exemption is granted and any of the five years following those exemption years, the assessor shall assess the property for taxation at its fair market value as of January 1 of that year and in addition the area shall be subject to a recapture tax. However, the area shall not be subject to the recapture tax if the owner, including one possessing under a contract of sale, and the owner’s direct antecedents or descendants have owned the area for more than ten years. The tax shall be computed by multiplying the consolidated levy for each of those years, if any, of the five preceding years for which the area received the exemption for fruit-tree or forest reservation times the assessed value of the area that would have been taxed but for the tax exemption. This tax shall be entered against the property on the tax list for the current year and shall constitute a lien against the property in the same manner as a lien for property taxes. The tax when collected shall be apportioned in the manner provided for the apportionment of the property taxes for the applicable tax year.
REPORT TO DEPARTMENT OF NATURAL RESOURCES: The county assessor shall keep a record of all forest and fruit-tree reservations in the county and submit a report of the reservations to the department of natural resources not later than June 15 of each year. See Code of Iowa Chapter 427C.
The governing body of a city may, by ordinance, designate an area of the city or the governing body of a county may, by ordinance, designate an area of the county outside the boundaries of a city, as a revitalization area, if that area meets certain criteria: See Code of Iowa Chapter 404.