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Updated 2025 Tax Year

Montgomery County
Property Tax Guide

Everything you need to know about property taxes in Montgomery County, IA. Rates, due dates, exemptions, and how it affects your monthly payment.

10 Official Sources
8 min read
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Quick Facts
Tax Rate
Varies by district - General Basic Fund: $3.39806 per $1,000 assessed value, plus school district and city rates
Exemptions
4+ Available
Section 1

How Property Tax Works

Montgomery County, Iowa operates under a property tax system that funds essential local services including schools, county government operations, emergency services, and infrastructure maintenance. Property taxes are the primary revenue source for these vital community services, with taxes calculated based on assessed property values and local tax rates set by various taxing authorities.

The effective property tax rate in Montgomery County varies significantly by location within the county due to different combinations of special taxing districts. For fiscal year 2025, the General Basic Fund levy rate is set at $3.39806 per $1,000 of assessed value, with additional rates applied by school districts, cities, and other special taxing authorities. Total effective rates typically range from approximately $8.37 per $1,000 for incorporated areas to $13.14 per $1,000 for rural areas, though your specific rate depends on which taxing districts serve your property location.

Property owners should note that actual tax bills depend not only on these rates but also on any applicable tax credits, which require separate applications and are not automatically applied to your assessment.

Section 2

What Makes Up Your Tax Bill

ComponentRate (per $1,000)Description
General Basic Fund$3.39806County general operations and services
Rural Basic Fund$3.95000*Additional levy for rural areas only
School DistrictVariesLocal school district operations and bonds
City/MunicipalVariesCity services (incorporated areas only)
Special DistrictsVariesFire, ambulance, library, drainage districts

*Applies to Rural Basic Fund taxable valuations of $489,706,055

Levy Year: These rates apply to fiscal year 2025 property tax bills.

Important Note: Your total tax rate depends on your specific location within Montgomery County. Properties in different cities, school districts, and special taxing districts will have different total rates. The county's tax rate limitations include a 3% valuation growth cap on certain levy components.

Section 3

When Are Property Taxes Due?

For the 2025/2026 tax year in Montgomery County, property taxes are due in two installments:

Pro tip: If you pay through mortgage escrow, your lender splits these payments across your monthly mortgage. If you pay directly, set calendar reminders to avoid late penalties.
Section 4

Supplemental Tax Bills

Supplemental taxes in Montgomery County may be assessed when there are changes in property ownership, completion of new construction, or other assessable improvements made during the tax year. These supplemental assessments ensure that property tax obligations are properly allocated between previous and current owners, or account for increased property value due to improvements.

When supplemental taxes are triggered, they are calculated based on the difference between the previous assessed value and the new assessed value, prorated for the portion of the tax year the change was in effect. For example, if a property improvement adds $50,000 in assessed value effective January 1st, and the total tax rate is $10.00 per $1,000, the supplemental tax would be $500 for the full year.

Supplemental tax bills are issued separately from regular property tax bills and have their own payment due dates. Property owners should budget for potential supplemental taxes when making significant property improvements or purchasing property mid-year.

Example Calculation

Example 1: $300,000 Home in Incorporated Area

  • Market Value: $300,000
  • Assessed Value: $300,000
  • Less: Homestead Credit (if applicable): -$4,850
  • Net Taxable Value: $295,150
  • Tax Rate: $8.37 per $1,000
  • Annual Tax: $2,470
  • Monthly (Escrow): $206

Example 2: $600,000 Home in Rural Area

  • Market Value: $600,000
  • Assessed Value: $600,000
  • Less: Homestead Credit (if applicable): -$4,850
  • Net Taxable Value: $595,150
  • Tax Rate: $13.14 per $1,000
  • Annual Tax: $7,820
  • Monthly (Escrow): $652

Example 3: $1,000,000 Property

  • Market Value: $1,000,000
  • Assessed Value: $1,000,000
  • Less: Homestead Credit (if applicable): -$4,850
  • Net Taxable Value: $995,150
  • Tax Rate: $10.00 per $1,000 (example blended rate)
  • Annual Tax: $9,952
  • Monthly (Escrow): $829

Note: Credits shown require separate application and eligibility verification. Tax rates vary by specific location and taxing districts.

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Section 5

Escrow & Property Taxes

Most mortgage lenders in Montgomery County require borrowers to maintain an escrow account for property tax payments, particularly for loans with less than 20% down payment. Your lender collects monthly escrow payments along with your mortgage payment, then pays your property taxes directly to the county when they become due.

Property taxes in Montgomery County are typically due in two installments: September 30th for the first half and March 31st of the following year for the second half. Your mortgage servicer will monitor these due dates and make payments on your behalf from your escrow account. It's important to verify current year due dates as they may change.

Lenders are required to provide annual escrow account statements showing deposits, payments made, and account balances. If your property taxes increase due to reassessment or rate changes, your lender may require an increase in your monthly escrow payment. Conversely, if taxes decrease, you may be entitled to an escrow refund or reduced monthly payments.

How HonestCasa Helps
  • Understand whether your escrow is set correctly
  • See how rising taxes will change your monthly payment
  • Plan ahead instead of being surprised by "shortage" letters
Section 6

Frequently Asked Questions

Q: When are property taxes due in Montgomery County for fiscal year 2025? A: Property taxes are due in two installments: September 30th for the first half and March 31st of the following year for the second half. Verify current year dates with the county treasurer.

Q: What tax credits are available and do they require application? A: The Homestead Credit is available for owner-occupied properties and requires annual application by July 1st. Disabled Veteran Homestead Credit and Military Exemption also require application by July 1st. These are NOT automatic and must be applied for each year.

Q: How does the Homestead Credit work? A: The Homestead Credit limits assessment increases rather than reducing market value. It provides a credit against your tax bill and requires you to own, occupy, and declare Iowa residency for income tax purposes. You must apply annually by July 1st.

Q: How often are properties reassessed in Montgomery County? A: Iowa requires property reassessment every two years. The county assessor reviews property values to ensure they reflect current market conditions, with appeals available during specified periods.

Q: What are the penalties for late property tax payments? A: Late payments typically incur interest and penalties. Contact the Montgomery County Treasurer's office for current penalty rates and policies for delinquent payments.

Q: Can I pay property taxes online? A: Check with the Montgomery County Treasurer's office for available online payment options and accepted payment methods for current tax year bills.

Q: Why is my tax rate different from my neighbor's? A: Tax rates vary based on the specific combination of taxing districts serving your property, including school district, city (if incorporated), and special districts like fire, ambulance, or library districts.

Q: How do I appeal my property assessment? A: Assessment appeals must be filed with the Montgomery County Board of Review during the specified appeal period, typically in April-May. Contact the county assessor's office for current deadlines and procedures.

Verified Sources

Backed by 10 Official Government Sources

Every fact in this guide is sourced from official county, state, and federal documents.

01
fiscal year 2025 budgetmontgomerycountyia.gov
02
Fiscal Year July 1, 2025 - June 30, 2026montgomerycountyia.gov
03
Tax Doc
Property Tax System Explanationmontgomerycountyia.gov
04
County
Montgomery County Property Taxnacdashboard.nara.gov
05
County
Property Tax Info - Montgomery County IAmontgomerycountyia.gov
06
County
Important Dates - Montgomery County IAmontgomerycountyia.gov
07
Credits & Exemptionsmontgomerycountyia.gov
08
County
Assessor's Office - Montgomery County IAmontgomerycountyia.gov
09
County
A Closer Look at County Funds and Property Tax Levmontgomerycountyia.gov
10
Frequently Asked Questions - Department of Financemontgomerycountymd.gov
All sources verified as of 2025 Tax Year

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