How do the three major property-tax bills compare?
January 26, 2026
Updated March 30, 2026
In the final month of the legislative session, the focus shifts to tax and spending. The property tax proposals introduced back in January have evolved through the committee process, and there are two bills eligible for debate.
The new House property tax bill, HF 2745, retains most of the original House plan and incorporates many provisions of Governor Reynolds' property tax proposal (SSB 3034/HSB 563). The Senate committee bill, SF 2472, is still a dramatic overhaul of the property tax system that has very little in common with the House bill.
Both proposals would restrict local governments' revenue growth and change the way property taxes are calculated. The House bill focuses on reducing the taxable value of residential properties and improving the transparency and readability of taxpayer notices, while the Senate makes sweeping structural changes to property taxes.
The Governor's plan did not pass through committee as a stand-alone bill, and a few of her plans did not make either of the new bills. These include a property tax freeze for seniors with homes valued at $350,000 or less; extending the assessment cycle from 2 years to 3 years; narrowing the scope of TIF urban renewal projects to public purposes only; and replacing some state tax credits with exemptions of the same value.
Here is a comparison of the main points from the three bills we've seen so far:
|
|
Current law |
House (HF 2745)(was HSB 596) |
Senate (SF 2472)(Was SSB 3001) |
|---|---|---|---|
|
City and county taxes |
Cities and counties where the tax base grows by more than 2.75% are limited in how much new money they can take in from the increased value. Tax base growth of 6% or greater is reduced by 3 percentage points, growth of 4-6% is reduced by 2%, and growth between 2.75-4% is reduced by 1%. |
Caps revenue growth at 2% (not including new valuation) |
Caps revenue growth at 2%-5%, depending on inflation (not including new valuation) |
|
School district taxes |
All school districts tax at the same base rate (uniform levy) and raise additional taxes for various purposes, including infrastructure |
No change to tax rates Limits school budget carryforward (Committee bill removed 60% vote requirement for bonds) |
Lowers school tax rates and allowable voter-approved levies, and shifts more school costs to the state |
|
Other taxing authorities |
In addition to school districts and local government, property taxes also fund other public entities such as county hospitals, community colleges and transit |
No change |
Limits levy rates for additional taxing authorities (county hospitals, emergency medical services, regional transit) |
|
Changes to the rollback |
The rollback system prevents large spikes in tax bills when housing values increase by limiting assessment growth to 3% statewide. The rollback represents the percentage of a property's value that can be taxed. For the 2025-26 property tax cycle, local tax rates are applied to 44.5345% of the assessed value of a residential property. Other classes of property use different types of assessment and rollback. |
Committee bill raises commercial property threshold above which a 90% rollback rate applies, from $150,000 to $350,000 (from Governor's bill) |
Phases out rollback system by 2037, at which time the full value of residential property is taxable (see next section) |
|
Residential tax breaks |
A taxpayer's primary home, or homestead, is eligible for a credit on the tax due for the first $4,850 of assessed value. The state reimburses local governments for revenue lost to the homestead credit and other credits mandated by state law. |
Introduces new 10% residential tax exemption up to $25,000 (does not apply to school district taxes) |
Replaces homestead credit, and state reimbursement to local governments, with a 50% homestead exemption regardless of home value |
|
New or expanded tax breaks for select Iowans |
Iowans 65+ are eligible for a $6,500 homestead exemption in addition to the credit. Low-income seniors, including renters, are eligible for additional credits. |
No change |
By 2029, homeowners age 65+ without a mortgage would receive a 100% tax exemption (does not apply to bonds) For seniors with a mortgage, age-based 10% exemption increase by decade: (60+: 60% value exempt, 70+: 70% value exempt, until 100% exempt at age 100)
|
|
|
Veterans receive a $4,000 exemption, and disabled veterans receive up to a 100% credit |
No change |
Creates a 50% exemption for disabled veterans Increases military service exemption from $4,000 to $7,000 |
|
|
|
Committee bill adopts the governor's plan for a tax-advantaged savings account for first-time homebuyers |
|
|
Changes to other taxes |
Of Iowa's 6% state sales tax, 1% is distributed to schools on a per-pupil basis (SAVE). Districts may use this for voter-approved infrastructure spending projects and/or to reduce property tax levies. Local governments may levy an additional 1% sales tax with voter approval. |
Extends SAVE through 2071 and diverts 30% of funds to property tax relief by 2034 (from Gov. bill) |
Allows local governments to increase the local option sales tax to 1.5% |
|
|
|
|
Additional registration fees up to $130 on electric vehicles, to increase with inflation |
|
|
|
|
Gas tax increased, indexed to inflation |
|
Administrative changes |
|
Requires plain language notices to taxpayers |
Allows tax notices to be posted digitally instead of mailed to each taxpayer |
|
Tax Increment Financing |
TIF allows local governments to invest in development projects as part of "urban renewal" and keep some of the the increased tax revenue for a limited time to help pay for the project instead of distributing it to other taxing authorities. |
Excludes school levy from TIF; limits projects to 20 years |
School taxes on data centers cannot be captured by the TIF; they must go to the school district |
|
Voter projects/ local bonds |
Local governments and school districts may propose additional taxes with the approval of voters. These are limited to specific purposes, and have different requirements regarding petitions, notices and elections. Current law allows some bond issuance below a set threshold without voter approval. |
No change (committee bill removed 60% vote threshold for revenue bonds) |
Prohibits bonds for city and county general operations |