How do the three major property-tax bills compare?
January 26, 2026
House Republicans introduced their property tax bill last week, giving us a third look at leadership's vision for how to reduce property taxes. The House bill is narrower in scope than the Governor or Senate bills. Like the proposals we saw in week 1, it would restrict local governments' revenue growth and make changes to tax credits and exemptions. But instead of a dramatic overhaul of the current system (Senate), or new tax breaks for select groups of Iowans (Senate and Governor), the House bill focuses on reducing the taxable value of residential properties and improving the transparency and readability of taxpayer notices.
Here is a comparison of the main points from the three bills we've seen so far:
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|
Current law |
House (HSB 596) |
Senate (SSB 3001) |
Governor (SSB 3034/HSB 563) |
|---|---|---|---|---|
|
City and county taxes |
Cities and counties where the tax base grows by more than 3% are limited in how much new money they can take in from new value. Tax base growth of 6% or greater is reduced by 3 percentage points, and growth between 3%-6% is reduced by 2 percentage points. |
Caps revenue growth at 2% (not including new valuation) |
Caps revenue growth at 2%-5%, depending on inflation (not including new valuation) |
Caps revenue growth at 2% |
|
School district taxes |
All school districts tax at the same base rate (uniform levy) and raise additional taxes for various purposes, including infrastructure |
Makes changes to voter-approved levies only (see below) |
Lowers school tax rates and allowable voter-approved levies, and shifts more school costs to the state |
No change |
|
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) |
No change |
|
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. |
No change |
Phases out rollback system by 2037, at which time the full value of residential property is taxable (see next section) |
Raises the threshold above which commercial property is subject to a 90% rollback rate, from $150k to $250k |
|
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 this credit. |
Introduces new $25,000 residential tax exemption (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 |
Changes the current credit to an exemption of the same value, and eliminates state reimbursement to local governments |
|
New or expanded tax breaks for select groups |
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 60+ without a mortgage would receive a 100% tax exemption (does not apply to bonds) |
Freezes taxes for Iowans 65+ with homes valued at $350,000 or less and repeals current 65+ homestead exemption |
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Veterans receive a $4,000 exemption, and disabled veterans receive up to a 100% credit |
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Creates a 50% exemption for disabled veterans |
Changes disabled veteran credit to a full exemption |
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Increases military service exemption from $4,000 to $7,000 |
Makes changes to rent credit for elderly and disabled Iowans |
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Introduces a state tax-advantaged savings account for first-time homebuyers |
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Changes to other taxes |
Of Iowa's 6% state sales tax, 1% is distributed to schools on a per-pupil basis. Districts may use this for voter-approved infrastructure spending projects and/or to reduce property tax levies. |
No change |
Allows a 1.5% local option sales tax (currently limited to 1%) |
Shifts 30% of SAVE funds (the 1% sales tax allocated to schools) to property tax relief by 2030 |
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Additional registration fees up to $130 on electric vehicles, to increase with inflation |
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Gas tax increased, indexed to inflation |
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Administrative changes |
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Requires plain language notices to taxpayers |
Allows tax notices to be posted digitally instead of mailed to each taxpayer |
Extends period between assessments from 2 to 3 years
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Tax Increment Financing |
TIF allows local governments to invest in development 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. |
No change |
School taxes on data centers cannot be captured by the TIF; they must go to the school district |
Limits TIF projects to a narrow scope of public purposes and introduces 20 year time limit |
|
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. |
More stringent thresholds and limits for bond elections |
Prohibits bonds for city and county general operations |
Prohibits bonds for city and county general operations |