Tax Data Series: Real Property
Real Estate Taxes: Real Property Tax Relief
10 Percent and 2.5 Percent Rollbacks, and Homestead
Exemption, by County, Distributed During Calendar Year
1998
State law (Section 319.302) requires the county auditor,
after application of the tax reduction factors (see
publication PD-23) in accordance with Section 319.301, to
reduce all real property taxes by 10 percent. In addition,
Section 323.152(B) requires the county auditor to further
reduce the real property tax on owner-occupied property an
additional 2.5 percent. Owner-occupants who are age 65 or
older or who are permanently and totally disabled may qualify
for further reduction in their real property taxes by
applying for a homestead exemption under Section 323.152(A).
A homestead exemption is granted for aged or disabled
owner-occupants if their total income does not exceed
$20,800.
Local governments are reimbursed in full from the state
general revenue fund for these tax reductions. The Department
of Education reimburses the schools for their share of the
tax reductions and the Tax Commissioner reimburses the
counties, townships, municipalities, and special taxing
districts for their shares of the tax reductions per Section
321.24(F) and Section 323.156. The county auditor also
receives 2 percent of the amount reimbursed under Section
323.152 as payment for administering the homestead exemption
and 2.5 percent rollback.
Table PD-1 indicates that during calendar year 1998, the
Departments of Taxation and Education together reimbursed
local governments a total of $883.3 million. This includes
$714.8 million for the 10 percent rollback, $66.8 million for
the homestead exemption (including $0.7 million for
late-filers), and $101.7 million for the 2.5 percent rollback
(including $0.1 million for late-filers). Additionally, the
Departments of Taxation and Education paid $3.4 million to
county auditors for administering the homestead exemption
($1.3 million) and 2.5 percent rollback ($2.0 million).
(Note: these fees are excluded from the table).