The legislature has approved a plan lawmakers say will reduce property taxes for Iowa homeowners by about $4 Billion over the next six years. After almost five months of negotiations, the bill was approved Sunday in the closing hours of the 2026 Iowa legislative session. Senator Dan Dawson, a Republican from Council Bluffs, is chairman of the Senate Ways and Means Committee.
Iowa homeowners will get a homestead tax exemption of up to $20,000 and the plan shifts $175 million in state funding to public schools. That move will also reduce taxes on all classes of property. There’s a two percent limit on annual property tax revenue growth in cities and counties, although the cap would not apply to paying debts or employee benefits and buying liability insurance. Republican Representative Carter Nordman of Dallas Center is chairman of the House Ways and Means Committee.
All but one Democrat in the Senate supported the plan, but a couple of Republicans and 20 Democrats in the House voted against it. Representative Aime Wichtendahl, a Democrat from Hiawatha, called it a Frankenstein bill.
Multi-family units have been taxed like single-family homes for over a decade and the plan will gradually raise property taxes on apartment and condo buildings to six percent within three years. Supporters of the move say unlike a home, multi-family buildings are owned by people who’re aiming to make a profit.
