Rollback History

Since 1978, residential and agricultural property has been subject to an assessment limitation order, or "rollback", that limits annual growth of property values (all other classes of property were eventually added). Prior to an overhaul of the property tax system stemming from action taken during the 2013 legislative session, property value growth was limited to 4 percent per year. If property values grew by more than 4 percent, the taxable value was rolled back to comply with the assessment limitation system. In addition, the rollback included a formula that tied the growth of residential property to that of agricultural property. This connection is commonly referred to as "coupling" and limited the growth of residential property to 4 percent of the amount of growth in agricultural value, whichever is less. Since the law's inception, residential property has always been subject to significant rollbacks.

While the property tax rollback system remains in place, several major changes were made during the 2013 legislative session. For each assessment year beginning in 2013, residential and agricultural property value growth will now be capped at 3 percent, or whichever is lowest between the two classes. Commercial and industrial will now have their own rollback, which will be 95 percent for valuations established during the 2013 assessment year. For valuations established during or after the assessment year beginning January 1, 2014, commercial and industrial property is rolled back to 90 percent. Thereafter, these classes will be taxed at 90 percent. (Rollback history and explanation taken from the Iowa League of Cities Budget Special Report for Fiscal Years 2014-15)