How high are Des Moines, Iowa property taxes?
The state of Iowa has the nation’s fourteenth highest median property tax rate. The median property tax rate clocks in at 1.44%. While this state median tax rate is higher than the average, it is significantly less than neighboring states like Illinois that has the second highest median property tax rate at 2.13%. Compared to Illinois property tax rates Des Moines‘ property tax rate looks like pennies on the dollar. However, Des Moines does currently have the third highest tax rate in the state of Iowa at 1.52% in 2015.
Still, while the city of Des Moines itself might have a comparatively high property tax rate, there is a lot of property tax rate variety in the Des Moines metro area. Property tax rates in the Des Moines metro area range from 0.89% in Altoona to 1.52% within the city limits. West Des Moines appears to have the median property tax rate of the metro area at 1.08%. As you can see, the property tax rate in the Des Moines metro area is very variable. The difference between one mile could end up saving you thousands of dollars over the lifetime of your house. Therefore it behooves you to carefully consider the property taxes when you look for a home in the Des Moines metro area.
Can we expect the Des Moines property tax rate to change?
Because property taxes tend to be the major source of local government funding, they are liable to change frequently. The Des Moines metro area is no exception. Government employee pensions are currently eating up nearly 20% of all revenue from property taxes. This means a shortage of funds elsewhere that could lead to a need to raise property taxes eventually. However, there are two things that will keep the city of Des Moines’ property taxes in check.
First, Des Moines already has the third highest property tax rate in the state and the highest in the central region of Iowa. Local lawmakers are reluctant to raise property tax any higher for fear of scaring off current and potential tax payers. This is where the variability in surrounding property taxes really helps the Des Moines metro area resident. Local lawmakers know its very easy and feasible for current and potential residents to move to West Des Moines or Altoona if they raise the property taxes too high. In fact, local lawmakers appear to understand this principal so well that they technically decreased the property tax rate in the city of Des Moines from 2014 to 2015. It was such a small decrease that it didn’t likely impact many homeowners directly, but it was a decrease instead of increase, nonetheless.
Second, the Iowa state legislature passed a bill in 2013 that dropped property assessed value from 100% to 90% by 2015. Given the local lawmakers’ reluctance to increase property tax rates in the city of Des Moines, your overall property tax burden would be reduced as instead of getting charged 1.52% on the full value of your home in 2013 you’d only be charged on 90% of the value of your home. To put that in perspective let’s say your Des Moines home was valued at $100,000. In 2013 at a property tax rate of 1.52% you’d pay $1,520 in property taxes. Now in 2015 with that same property tax rate you’d pay $1,368.
However, other towns in the Des Moines metro area have increased their property tax rates to make up for the overall lose in taxable property value. For instance, the Windsor Heights community increased their 2014 mill rate from $13.90 to $15.35 in 2015. Given the reduction in taxable value set by the state legislature and the relatively large leap in mill rates set by the local Windsor Heights law makers, the actual property tax rate for Windsor Heights increased from 1.32% in 2014 to 1.38% in 2015.
How does Des Moines property taxes compare to other medium-sized Midwestern cities?
So we know how the city of Des Moines stacks up to other towns in its own metro area, but what about other cities from the same region and with a similar population? To find out let’s compare the two Midwestern cities closest in size to Des Moines: Fort Wayne, Indian and Madison, Wisconsin.
Fort Wayne, Indiana is a medium sized U.S. with a population of about 253,000 residents, which is only about 3,000 more residents than Des Moines. The areas surrounding Fort Wayne, Indiana have a relatively elevated property tax value in comparison with the rest of the state and county. The Indiana state effective property tax rate is only 0.86%, while Allen County’s property tax rate is 2.22%. As for the area around and in Fort Wayne, it has an effective property tax rate of 3.4%. Madison, Wisconsin is located in Dane County and has a population of 233,000 residents. Dane County has a higher tax rate than the state’s average of 1.96%. The current county property tax rate is 2.01%.
As we can see, while Des Moines‘ property tax rate may be high for Iowa, it is comparatively much lower than other Midwestern of a similar size.
2 Point Highlight
“As we can see, while Des Moines’ property tax rate may be high for Iowa, it is comparatively much lower than other Midwestern of a similar size.”
“Still, while the city of Des Moines itself might have a comparatively high property tax rate, there is a lot of property tax rate variety in the Des Moines metro area.”
