Here’s a fair warning: Property owners should gird themselves now for a double-digit increase in assessments next year. 

That’s the message Polk County Assessor Randy Ripperger is giving to elected officials who are bound to hear from constituents after the assessments are distributed early next year.

The cause for the increase is that most classes of real estate are selling at 90 percent or less of current assessed value. Part of that is due to property tax reductions that the Iowa Legislature approved in 2013.

As a result of the legislation, owners of commercial properties pay taxes based on 90 percent of assessed value. By 2022, owners of multifamily properties will pay taxes at the same rate as owners of residential properties, which for 2017 was 55.6 percent. Taxes on multifamily properties drop 3.75 percent a year until they reach the residential level.

Sales of apartment properties are running about 82.5 percent of assessed value, Ripperger said. Part of that is due to the fact that return on investment on those properties is increasing thanks to the lower tax valuations. In addition, the area is seeing an influx of outside investors, he said.

Meanwhile, the median sales ratio for residential property is at 90 percent.

Under state law, the sales ratios — calculated by dividing each property’s assessment by its sales price — must fall between 95 and 105 percent. Ripperger said his office aims for 99 percent when it conducts assessments in every odd-numbered year.

In 2017, assessments increased about 8.5 percent on average.