Iowa City considers abating taxes on flood homes it buys

IOWA CITY - Iowa City is considering not paying property taxes on flood-damaged homes it acquires this fiscal year through the federal buyout program.

This would be abatement, an issue that has gotten a lot of attention in Linn County recently. That county's supervisors recently voted to forgive property taxes for some flood victims.

Johnson County's supervisors decided last year not to do that.  

The city's situation would be different, though. 

First, City Attorney Eleanor Dilkes said Wednesday at a meeting of Iowa City-area elected officials that she reads the state code as saying a city does not have to ask the county's permission. If it doesn't want to pay the taxes, it doesn't.  

Also, most of those seeking abatements in Linn County are homeowners whose property was severely damaged in last year's flood.

Iowa City would be using this power for flood-damaged properties it is buying. When a city buys land, it goes off the tax rolls. But that occurs on July 1, so the city has to pay its prorated share of the tax bill for the rest of the year.

Iowa City has 40 properties on its buyout list, although a few owners are not expected to sell.  It closed on seven homes before July 1, said David Purdy, the city's flood specialist. It has bought five since then and hopes to acquire the rest by next spring.

 The City Council still must decide what it wants to do. Dilkes said the city estimates the taxes it would owe at $36,000, part of which would go to the school district and the county.

Coralville plans to pay taxes on the properties it acquires because the amount is so small and it will get its share back, City Administrator Kelly Hayworth said.

None of the elected officials at the meeting objected to the possibility of Iowa City not paying taxes on the properties.

Supervisor Rod Sullivan said it was good news because it allowed the county to keep a consistence stance of denying abatement requests.