Commercial Tax Abatements
Tax abatement allows a temporary exemption from taxation on a portion of the assessed value added by new construction and/or improvements to an existing structure. Please note that while an improvement may be eligible for tax abatement, tax abatement can only be received if it is applied for at the correct time.
To receive the full benefit, the tax abatement application must be filed by February 1 after the calendar year when the new construction / improvement is made. For 2011 new construction / improvements, the application must be filed by February 1, 2012. We strongly recommend consulting with the City's Permit and Development Center regarding tax abatement when you apply for your building permit.
Certain areas in Des Moines are designated to receive commercial tax abatement. Commercial tax abatement is available for properties that are classified as "commercial" or "industrial" by the assessor. Check with the Permit & Development Center to see if the property is in an eligible area. In addition, there may also be design standards that must be met in order to qualify for commercial abatement. The abatement is for renovation or new construction and must increase the assessed value of the property by at least 15%.
Properties can use either of the following schedules:
3yr. / 100% Schedule 10yr. / Declining Abatement
Year 1 100% abated Year 1 80% abated
Year 2 100% abated Year 2 70% abated
Year 3 100% abated Year 3 60% abated
Year 4 50% abated
Year 5 & 6 40% abated
Year 7 & 8 30% abated
Year 9 & 10 20% abated
Industrial Tax Abatement
Industrial tax abatement is available throughout Des Moines subject to certain conditions required by state law. The City Assessor must determine the business is classified as "industrial" and is located on land zoned for industrial purposes (as per Chapter 427B, Code of Iowa).
Chapter 427B states the following is generally eligible for industrial tax abatement:
* New construction
* Rehab / Retrofitting of existing building for improvements required due to economic obsolescence and necessary to meet current industrial
standards for manufacturing / processing, subject to pre-approval.
Pre-approval for rehab / retrofit tax abatement must be obtained from the Des Moines City Council before construction starts. Contact the Office of Economic Development at (515) 283-4004 for the pre-approval process.
The abatement is allowed for the value added to the property for a five-year period using the following schedule.
Tax Year Amount Abated
Year 1 75%
Year 2 60%
Year 3 45%
Year 4 30%
Year 5 15%
An application for industrial tax abatement must be filed by the owner of the property with the Polk County Assessor by February 1 following the calendar year in which the improvement is made.
The Industrial Tax Abatement application and instructions are available on the Polk County website.