Pay me now, or maybe...never?
Many property owners have just paid their second installment of their annual property tax bill. The taxes, paid a year in arrears, seem to always go up, whether it is the levy or more likely the valuation that increases.
People that own property realize that will pay taxes. It goes with the territory. Commercial property owners pay a hefty rate, one that Gov. Branstad is trying to reduce.
Developers take a calculated risk when they purchase a tract of land, create a subdivision and sell lots. If the location is good and housing is strong, a tidy profit can be turned in a relatively short period of time.
But, if the economy sours and housing starts dry up, like they have in nearly every place in America (even Le Mars) in the past two years, the calculated risk can quickly turn into a liability.
According to Iowa law, three years after a lot is platted, it must be fully assessed as an improved lot, whether or not it is actually improved with permanent construction.
Developers have successfully lobbied the Iowa House for tax relief. A bill that would strike the three-year limitation on platted properties has passed the House, allowing land to be taxed as "undeveloped" until a permanent structure is built. The bill would apply this new assessment process to all subdivision plats recorded after Jan. 1, 2004, and it applies to assessment years beginning Jan. 1, 2011.
The Iowa Senate is now considering the measure.
While we can sympathize for the developers, changing the law and leaving it open ended, is not, in our opinion, a good idea. Developers are speculators, and giving this carte blanche tax relief robs municipalities of revenue and is frankly simply shifting the tax burden.
Risk is risk. Developers know what they are getting into when they buy the land. The rest of us shouldn't have to pick up the slack when times turn tough.