POLITICS

How Iowa's new $100M property tax cut would work — explained in 60 seconds

Portrait of Stephen Gruber-Miller Stephen Gruber-Miller
Des Moines Register
State Rep. Heather Matson, D-Ankeny, speaks from the House floor at the Iowa State Capitol, Monday, May 1, 2023.

A $100 million property tax cut could soon become law after Iowa lawmakers voted overwhelmingly to pass the legislation earlier this week.

A central feature of House File 718 would require cities and counties to use excess revenue growth to lower property taxes.

The basics of the Iowa property tax plan

The bill divides cities and counties into three tiers, based on whether their revenue grows by less than 3% annually, between 3% to 6% or above 6%.

It establishes a new formula that requires local governments to use a portion of the revenue growth to reduce property taxes to bring them back to maximum tax levy levels set in Iowa law.

If a city or county's revenue does not grow by at least 3%, it would not need to reduce its levy.

More:Iowa lawmakers vote to pass $100M property tax cut, with breaks for seniors, veterans

Property tax breaks for seniors and veterans

The bill provides an additional $6,500 homestead property tax exemption for Iowans 65 and older. And it more than doubles a property tax exemption for veterans by increasing it to $4,000 in taxable value.

That's expected to provide $50 million in tax breaks for seniors and $7 million for veterans statewide.

More:Which Des Moines metro areas saw property assessments jump most? These maps will show you:

More latitude for local government fees

Cities and counties would also gain new options for assessing fees as a way to provide alternate revenue streams.

The bill contains new requirements for transparency in property tax bills and would require bond elections to be held at the same time as general elections.

You can read much more about the property tax proposal here.

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Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.

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