§ 404.3 — Basis of tax exemption

Iowa § 404.3

• Jurisdiction: Iowa
• Title IX: LOCAL GOVERNMENT
• Ch. 404: URBAN REVITALIZATION TAX EXEMPTIONS

Text

1. All qualified real estate assessed as residential property is eligible to receive an
exemption from taxation based on the actual value added by the improvements. The
exemption is for a period of ten years. The amount of the exemption is equal to a percent of
the actual value added by the improvements, determined as follows: One hundred fifteen
percent of the value added by the improvements. However, the amount of the actual value
added by the improvements which shall be used to compute the exemption shall not exceed
twenty thousand dollars and the granting of the exemption shall not result in the actual value
of the qualified real estate being reduced below the actual value on which the homestead
credit is computed under section 425.1.
2. All qualified real estate is eligible to receive a partial exemption from taxation on
the actual value added by the improvements. The exemption is for a period of ten years.
The amount of the partial exemption is equal to a percent of the actual value added by the
improvements, determined as follows:
a. For the first year, eighty percent.
b. For the second year, seventy percent.
c. For the third year, sixty percent.
d. For the fourth year, fifty percent.
e. For the fifth year, forty percent.
f. For the sixth year, forty percent.
g. For the seventh year, thirty percent.
h. For the eighth year, thirty percent.
i. For the ninth year, twenty percent.
j. For the tenth year, twenty percent.
3. All qualified real estate is eligible to receive a one hundred percent exemption from
taxation on the actual value added by the improvements. The exemption is for a period of
three years.
4. a. All qualified real estate assessed as residential property is eligible to receive a one
hundred percent exemption from taxation on the actual value added by the improvements.
b. The exemption is for a period of ten years.
5. A city or county may adopt a different tax exemption schedule than those allowed in
subsection 1, 2, 3, or 4. The different schedule adopted shall not allow a greater exemption,
butmayallowasmallerexemption,inaparticularyear,thanallowedintheschedulespecified
in the corresponding subsection of this section. A different schedule adopted by a city or
county shall apply to every revitalization area within the city or county, unless the qualified

property is eligible for an exemption pursuant to section 404.3A or 404.3B, and except in
areas of the city or county which have been designated as both urban renewal and urban
revitalization areas. In an area designated for both urban renewal and urban revitalization, a
city or county may adopt a different schedule than has been adopted for revitalization areas
which have not been designated as urban renewal areas.
6. The owners of qualified real estate eligible for the exemption provided in this section
or section 404.3A or 404.3B shall elect to take the applicable exemption or shall elect to take
the applicable exemption provided in the different schedule authorized by subsection 5 and
adopted in the city or county plan if a different schedule has been adopted. Once the election
has been made and the exemption granted, the owner is not permitted to change the method
of exemption.
7. The tax exemption schedule specified in subsection 1, 2, 3, or 4 shall apply to every
revitalization area within a city or county unless a different schedule is adopted in the city or
county plan as provided in section 404.2 and authorized by subsection 5.
8. “Qualified real estate” as used in this chapter and section 419.17 means real
property, other than land, which is located in a designated revitalization area and to which
improvements have been added, during the time the area was so designated, which have
increased the actual value by at least the percent specified in the plan adopted by the city
or county pursuant to section 404.2 or if no percent is specified then by at least fifteen
percent, or at least ten percent in the case of real property assessed as residential property
or which have, in the case of land upon which is located more than one building and not
assessed as residential property, increased the actual value of the buildings to which the
improvements have been made by at least fifteen percent. “Qualified real estate” also means
land upon which no structure existed at the start of the new construction, which is located in
a designated revitalization area and upon which new construction has been added during the
time the area was so designated. “Improvements” as used in this chapter and section 419.17
includes rehabilitation and additions to existing structures as well as new construction on
vacant land or on land with existing structures. However, new construction on land assessed
as agricultural property shall not qualify as “improvements” for purposes of this chapter and
section 419.17 unless the governing body of the city or county has presented justification
at a public hearing held pursuant to section 404.2 for the revitalization of land assessed as
agricultural property by means of new construction. Such justification shall demonstrate, in
addition to the other requirements of this chapter and section 419.17, that the improvements
on land assessed as agricultural land will utilize the minimum amount of agricultural land
necessary to accomplish the revitalization of the other classes of property within the urban
revitalization area. However, if such construction, rehabilitation or additions were begun
prior to January 29, 1979, or one year prior to the adoption by the city or county of a plan of
urban revitalization pursuant to section 404.2, whichever occurs later, the value added by
such construction, rehabilitation or additions shall not constitute an increase in value for
purposes of qualifying for the exemptions listed in this section. “Actual value added by the
improvements” as used in this chapter and section 419.17 means the actual value added as
of the first year for which the exemption was received.
9. The fifteen and ten percent increase in actual value requirements specified in
subsection 8 shall apply to every revitalization area within a city or county unless different
percent increases in actual value requirements are adopted in the city or county plan as
provided in section 404.2. However, a city or county shall not adopt different requirements
unless every revitalization area within the city or county has the same requirements and the
requirements do not provide for a greater percent increase than specified in subsection 8.

Legislative History

[C81, §404.3]