DES MOINES, Iowa – The Iowa Senate and Iowa House of Representatives passed their version of a property tax relief bill on Wednesday afternoon. Each chamber’s bill had overwhelming bipartisan support.
The Iowa Senate passed SF 569 by a 48 to 1 vote.
SF 569 provides $4.5 million in relief by eliminating two levies and $57 million in relief by changing the veterans and seniors property tax credit to an exemption. It also creates $45.4 million in relief through city and county levy reform, estimated by the Iowa Department of Management.
Senate Republicans state the bill preserves the Taxpayer Reiief Fund to allow the Iowa Legislature “to remain on the path to reduce and eliminate the state income tax.”
The bill automatically reduces levy rates when assessments rise so taxpayers are protected from massive rate increases and also to control local government spending. It increases transparency by changing notice requirements and providing clarity on local budgets.
“Iowans from river to river have opened their property assessments this year to shock and dismay,” State Senator Dan Dawson, R-Council Bluffs, the bill’s manager, said in a statement. “20%, 30%, even 50% increases in valuations have left property taxpayers angry and looking for relief. Senate Republicans heard them. Today’s resulting reform is real relief now and structural relief for the future.”
“In 2021, the Iowa Legislature moved the cost of mental health services from property taxes to the state general fund. Less than half the counties in Iowa passed those savings to the property taxpayer,” Senate Majority Leader Jack Whitver, R-Grimes, said. “Unlike past efforts to provide property tax relief, SF 569 is not a tax shift. It is $100 million in relief and controls the growth of local government spending. It avoids the pitfall of pouring water into a bucket with a big hole in the bottom.”
The Iowa House passed HF 718 93 to 1 to provide over $200 million in property tax relief. The bill makes a number of reforms providing property owners with immediate relief and certainty for their future tax bills.
The Iowa House bill reduces the 5.40 levy by $1 and has the state fund the difference, which lawmakers say will deliver more than $200 million in real, immediate tax relief to Iowans.
The bill also caps annual property tax increases per parcel to three percent for residential and agricultural properties and eight percent for commercial and industrial properties.
The bill also requires tax bills to look like an itemized receipt, including information on where the money is going. It also moves all elections for bonding to every November.
“The current system is complicated and provides very little transparency and no certainty for taxpayers,” State Rep. Bobby Kaufmann, R-Wilton, the bill’s manager, said. “I don’t think there’s a single legislator that hasn’t heard the call for property tax reforms and reductions. Iowans – we have heard you. We’ve heard that the tax you need us to address most is property taxes. We got to work and this bill delivers the relief and certainty that you need.”
“The Iowa Legislature has done great work the past few years lowering income taxes for Iowans,” Speaker Pat Grassley, R-New Hartford, said. “With House Republicans representing all 99 of Iowa’s 99 counties, we are in a better position than ever to listen to the concerns of Iowans. This session we made our property tax relief bill House File 1, as it is a top priority for our caucus and for Iowans.”
