Iowa Administrative Code › Agency 701 - Revenue Department › Title II - Property Tax › Chapter 110 - Property Tax Credits and Exemptions › Rule 701-110.8 - Urban Revitalization Partial Exemption

Current through Register Vol. 47, No. 3, July 24, 2024
(1)
Area designated.
An area
				containing only one building or structure cannot be designated as an urban
				revitalization area (1980 O.A.G. 786).
(2)
Prior approval.
To
				obtain prior approval for a project, a property owner's proposal must be
				approved by a specific resolution addressing the proposal and passed by the
				city council or county board of supervisors. The original ordinance providing
				for the urban revitalization area does not constitute the granting of prior
				approval for any particular project. Also, prior approval for a project can
				only be granted by resolution of the city council or county board of
				supervisors; an official or representative of a city or county does not have
				the independent authority to grant prior approval for a project.
(3)
Eligibility for
				exemption.
Improvements made as a result of a project begun more than
				one year prior to a city's or county's adoption of an urban revitalization
				ordinance are not eligible to receive the partial exemption even though some of
				the improvements are added during the time the area was designated as an urban
				revitalization area. For a project commenced within one year prior to the
				adoption of an urban revitalization ordinance, the partial exemption can be
				allowed only for those improvements constructed on or after the effective date
				of the ordinance. (1982 O.A.G. 358)
(4)
Minimum value added.
Once the minimum value added required by Iowa Code section
				404.3(7)  has
				been assessed, any amount of additional value added to the property in
				subsequent years is eligible for the partial exemption. The value added subject
				to partial exemption for the first year for which an exemption is claimed and
				allowed shall include value added to the property for a previous year even if
				the value added in the previous year was not by itself sufficient to qualify
				for the partial exemption.
For example, assume that an urban revitalization project is
				  begun on commercial property having an actual value of $50,000 as of January 1,
				  1984. As a result of improvements made during 1984, the actual value of the
				  property as of January 1, 1985, is determined to be $55,000. Additional
				  improvements made during 1985 increase the actual value of the property to
				  $70,000 for the 1986 assessment. In this example, no partial exemption can be
				  allowed for 1985 since the value added for that year is less than 15 percent of
				  the actual value of the property prior to construction of the improvements. A
				  partial exemption can be allowed for 1986 and subsequent years for the $20,000
				  value added in both 1985 and 1986, providing a valid application for the
				  partial exemption is filed between January 1, 1986, and February 1, 1986,
				  inclusive.
(5)
Application for partial exemption.
a.
Prior approval.
If a
				taxpayer has secured a prior approval resolution from the city council or the
				county board of supervisors, the partial exemption cannot be obtained until the
				year in which all value added for the project is first assessed. A partial
				exemption can be allowed only if an application is filed between January 1 and
				February 1, inclusive, of the year in which all value added for the project is
				first assessed. If an application is not filed during that period, no partial
				exemption can be allowed for that year or any subsequent year. The submission
				to the city council or the county board of supervisors of a proposal to receive
				prior approval does not by itself constitute an application for the partial
				exemption.
For example, assume a city council or county board of
				  supervisors approves a prior approval resolution in April 1984 for a
				  revitalization project to be completed in September 1986. Assuming all
				  construction on the project is completed in 1986, no partial exemption can be
				  allowed until 1987 since that would be the year in which all value added for
				  the project is first assessed. To receive the partial exemption, a valid
				  application would have to be filed between January 1, 1987, and February 1,
				  1987, inclusive.
b.
No prior approval.
If a project has not received a prior
				approval resolution, a taxpayer has the option of receiving the partial
				exemption beginning with any year in which value is added to the property or
				waiting until all value added to the property is first assessed in its
				entirety. To secure a partial exemption prior to the completion of the project,
				an application must be filed between January 1 and February 1, inclusive, in
				each year for which the exemption is claimed.
For example, assume a revitalization project is begun in June
				  1984 and completed in September 1985, that no prior approval resolution for the
				  project has been approved, and that a ten-year exemption period has been
				  selected. Assume further that as a result of construction on the project, value
				  is added for the assessment years 1985 and 1986. If an application is filed
				  between January 1, 1985, and February 1, 1985, inclusive, a partial exemption
				  could be allowed for the value added for 1985 beginning with the 1985
				  assessment and ending with the 1994 assessment. If an application is filed
				  between January 1, 1986, and February 1, 1986, inclusive, a partial exemption
				  could be allowed for the value added for 1986 beginning with the 1986
				  assessment and ending with the 1995 assessment. The partial exemption allowable
				  for the years 1986 through 1995 would be against the value added for 1986 as a
				  result of improvements made during calendar year 1985.
In the example above, the taxpayer may elect not to file an
				  application for the partial exemption in 1985. In this situation, if an
				  application is filed between January 1, 1986, and February 1, 1986, inclusive,
				  a partial exemption could be allowed for the total value added for 1985 and
				  1986 and would apply to assessments for the years 1986 through 1995.
c.
Filing
				deadline.
If February 1 falls on a Saturday or Sunday, an application
				for the partial exemption may be filed the following Monday. Applications
				submitted by mail must be postmarked on or before February 1, or on or before
				the following Monday if February 1 falls on a Saturday or Sunday.
d.
Extended filing deadline.
The exemption is allowable for the total number of years in the exemption
				schedule if a claim for exemption is filed within two years of the original
				February 1 filing deadline. The city council or county board of supervisors may
				by resolution provide that an application for the partial exemption can be
				filed by February 1 of any assessment year the area is designated as an urban
				revitalization area. The exemption shall be allowed for the same number of
				years remaining in the exemption schedule selected as would have been remaining
				had the claim for exemption been timely filed.