Iowa Administrative Code › Agency 701 - Revenue Department › Title II - Property Tax › Chapter 102 - Assessment Practices and Equalization › Rule 701-102.1 - Classification of Real Estate

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Responsibility of assessors.
All real estate subject to
				assessment by city and county assessors shall be classified as provided in this
				rule. It shall be the responsibility of city and county assessors to determine
				the proper classification of real estate. There can be only one classification
				per property under this rule, except as provided for in paragraph
				71.1(4)
"d."
An assessor shall not assign one classification to
				the land and a different classification to the building or separate
				classifications to the land or separate classifications to the building. A
				building or structure on leased land is considered a separate property and may
				be classified differently than the land upon which it is located. The
				determination shall be based upon the best judgment of the assessor following
				the guidelines set forth in this rule and the status of the real estate as of
				January 1 of the year in which the assessment is made. The assessor shall
				classify property according to its present use and not according to its highest
				and best use. See subrule 71.1(9) for an exception to the general rule that
				property is to be classified according to its use. The classification shall be
				utilized on the abstract of assessment submitted to the department of revenue
				pursuant to Iowa Code section
				441.45. See rule
				701-71.8 (428,441).
(2)
Responsibility of boards of
				review, county auditors, and county treasurers.
Whenever local boards
				of review, county auditors, and county treasurers exercise assessment functions
				allowed or required by law, they shall classify property as provided in this
				rule and adhere to the requirements of this rule.
(3)
Agricultural real
				estate.
a.
Generally.
Agricultural real estate shall include all tracts
				of land and the improvements and structures located on them which are in good
				faith used primarily for agricultural purposes except buildings which are
				primarily used or intended for human habitation as defined in subrule 71.1(4).
				Land and the nonresidential improvements and structures located on it shall be
				considered to be used primarily for agricultural purposes if its principal use
				is devoted to the raising and harvesting of crops or forest or fruit trees, the
				rearing, feeding, and management of livestock, or horticulture, all for
				intended profit. Agricultural real estate shall also include woodland,
				wasteland, and pastureland, but only if that land is held or operated in
				conjunction with agricultural real estate as defined in
				paragraph
"a"
or
"b"
of this
				subrule.
b.
Vineyards.
Beginning with valuations established on or after
				January 1, 2002, vineyards and any buildings located on a vineyard and used in
				connection with the vineyard shall be classified as agricultural real estate if
				the primary use of the land and buildings is an activity related to the
				production or sale of wine.
c.
Algae cultivation and production.
Beginning with valuations
				established on or after January 1, 2013, real estate used directly in the
				cultivation and production of algae for harvesting as a crop for animal feed,
				food, nutritionals, or biofuel production shall be classified as agricultural
				real estate if the real estate is an enclosed pond or land which contains a
				photobioreactor. Pursuant to 2013 Iowa Acts, House File 632, section 1, a
				photobioreactor is not attached to land upon which it sits and shall not be
				assessed and taxed as real property.
(1)
				Determining direct usage. To determine if real estate is used "directly" in the
				cultivation and production of algae, one must first ensure that the real estate
				is used to perform activities that cultivate and produce algae and is not used
				for activities that occur before or after the cultivation and production of
				algae. If the real estate is used to perform activities for the cultivation and
				production of algae, to be "directly" so used, the real estate must be used to
				perform activities that are integral and essential to the cultivation and
				production, as distinguished from activities that are incidental, merely
				convenient to, or remote from cultivation and production. The fact that real
				estate is used for activities that are essential or necessary to the
				cultivation and production of algae does not mean that the real estate is also
				"directly" used in production. Even if the real estate is used for activities
				that are essential or necessary to the cultivation and production of algae, if
				the activities are far enough removed from the cultivation or production of
				algae, the real estate would not qualify for the agricultural
				designation.
(2) Examples. The
				following are nonexclusive examples of real estate which would not be directly
				used in the cultivation and production of algae:
1. Real estate that is used to store,
				assemble, or repair machinery and equipment that is used for cultivation and
				production of algae.
2. Real estate
				that is used in the management, administration, advertising, or selling of
				algae.
3. Real estate that is used
				in the management, administration, or planning of the cultivation and
				production of algae.
4. Real estate
				that is used for packaging of the algae which has been produced and
				cultivated.