IowaSF 247291st General Assembly (2025–2026)SenateWALLET

A bill for an act relating to state and local government taxes, fees, financial authority, and budgets, by modifying property assessment provisions, divisions of revenue, and funding from the secure an advanced vision for education fund, establishing a program for first-time homebuyers, modifying and making appropriations, and including effective date, applicability, and retroactive applicability provisions. (Formerly SSB 3001.) Effective date: 05/18/2026, 07/01/2026, 01/01/2027. Applicability date: 01/01/2026, 07/01/2026, 01/01/2027, 07/01/2027, 07/01/2028.

Sponsored By: COMMITTEE ON WAYS AND MEANS

Signed by Governor

ways and means

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Bill Overview

Analyzed Economic Effects

60 provisions identified: 21 benefits, 11 costs, 28 mixed.

Bigger homestead exemptions and senior relief

The law replaces the homestead credit with a growing exemption. For 2026, it exempts 25% of value up to $175,000. Each year it rises by 2.5 points and $17,500 until it reaches 50% and $350,000 in 2036. If you are 65+ and your home has no mortgage on January 1, you get an extra exemption that grows to 100% by 2029. This senior exemption does not cover voter‑approved or bond levies. If you already filed for homestead relief, you keep it and do not need to file again. If you become newly eligible, you are granted the new exemption without filing.

Bigger property tax break for veterans

The veterans property tax exemption rises to $5,000 for the 2026 assessment year, $6,000 for 2027, and $7,000 for 2028 and after. This cuts your taxable value by the listed amount if you meet veteran status rules. Your actual tax savings depend on local property tax rates.

Seniors keep extra $6,500 homestead break

Eligible homeowners age 65+ keep an extra $6,500 exemption in taxable value. This stacks on top of the new homestead exemption. It applies to assessment years beginning January 1, 2026.

Bigger homestead breaks for seniors

Beginning January 1, 2026, if you are 65 or older, you get a percent exemption on your homestead’s taxable value. In 2026 it is 25% up to $175,000, and it rises each year toward a larger cap. If your home had no mortgage on January 1, you also get an extra break that grows to 100% of taxable value in 2029 and after (not for voter‑approved levies or bonds). County assessors must give homestead credit claim forms to seniors and people with disabilities who ask in writing, and you can return the form by mail or in person.

Higher taxes on multiresidential property

Starting January 1, 2027, multi‑unit housing is back in its own class and treated like residential for equalization. Its assessed percentage is 72.5% in 2027. It then rises by 2.75 points each year until it reaches 100% by 2037. This can raise taxes for building owners and may affect rents.

Home assessments rise each year

Starting with assessment years that begin January 1, 2026 and 2027, homes are assessed at 72.5% of market value. After 2027, the assessment percent rises by 2.75 points each year. It reaches 100% for assessment years beginning on or after January 1, 2037. A multiresidential class returns and follows the same schedule. Other non‑agricultural classes are at 100% from 2026.

Veterans’ property taxes: relief and limits

Qualifying veterans and some surviving spouses or children get a homestead credit equal to the full property tax on their homestead. For disabled veterans who apply on or after July 1, 2026, the law narrows what counts as a homestead to one‑half acre and excludes appurtenances; earlier filers keep their benefits and do not need to refile. Higher military service exemption amounts apply back to assessment years that start on or after January 1, 2026. The prior disabled‑veteran homestead section is repealed and replaced in a new location.

State aid lowers school property taxes

For budget years before July 1, 2027, the state pays school property tax adjustment aid and replacement payments so districts can lower levies. The state appropriates whatever amount is needed each year to make these payments. Before July 1, 2026, any remaining funds after lowering district rates must further cut additional property taxes by raising the foundation base per‑pupil share; any money left at the end of the year beginning July 1, 2025 goes to the state general fund. Money in the Property Tax Equity and Relief Fund and the foundation base supplement fund is used to make required payments; any balances at the end of the year beginning July 1, 2026 transfer to the secure vision fund or the state general fund based on the source.

Bigger property credit or rent rebate

Starting January 1, 2030, the maximum additional homestead credit or rent reimbursement rises from $1,000 to $1,500. This raises the most eligible claimants can get by $500 per year.

Caps on county hospital property taxes

Beginning July 1, 2027, county hospital levies under two chapters use the same cap formula. The rate per $1,000 equals 1,000 × (105% of this year’s certified levy dollars) ÷ (next year’s total assessed value minus new valuation). New valuation means value from new construction, major improvements, and boundary changes. This cap limits how fast the levy rate can grow and can reduce future bill increases.

New limits on school management levies

Districts with large unspent management levy balances face caps that tighten over time. If the unspent balance is at least 180% of the three‑year average of covered costs in FY 2028, no levy can be certified; the limit steps down to 175% (FY 2029), 170% (FY 2030), 165% (FY 2031), and 160% (FY 2032+). If a levy is allowed, the most a district can certify equals the threshold percent times the three‑year average minus the unspent balance. Boards must certify levies by April 30, subject to these limits. Districts with FY 2025 balances above that year’s spending must report by November 15, 2026; a state committee reviews and recommends limits for years starting July 1, 2028.

Bigger senior homestead break, new rules

If you are 65 or older on January 1, your homestead exemption cap is $3,250 for 2023 and $6,500 for 2024 and later. Starting January 1, 2030, people age 70+ have their extra homestead credit calculated the same as for age 65+, using income limits indexed to inflation. The law defines three claimant groups for elderly and disabled credits and adds a 250% of poverty income test for the oldest group. From January 1, 2030, the credit treats your property taxes or qualifying rent as no more than $1,500 when calculating the benefit.

Caps on some local levy rates

Beginning July 1, 2027, certain districts face a cap on levy rates per $1,000 under chapters 357F, 357G, and 422D. The cap equals 1,000 × (105% of this year’s certified levy dollars) ÷ (assessed value for the budget year minus new valuation. This limits how fast rate‑limited levies can grow and can slow property tax increases.

Lower taxes for homes in parks

The law exempts mobile and manufactured homes in a mobile home park or manufactured home community from property tax. Modular homes in parks that existed on or before January 1, 1998 are also exempt. Homes in land‑leased communities are taxed the same as homes in mobile home parks. If a home that became real estate is moved back into a park or retailer inventory, the assessor removes its assessed value as of the next January 1. Manufacturers’ and retailers’ inventory of homes and towable RVs not used as housing are exempt from annual property tax. For taxes due before July 1, 2026, the old rules still apply. Several prior manufactured home tax code sections are repealed to support this change.

Lower transit property tax caps

The transit levy cap drops from $0.95 to $0.80 per $1,000 of assessed value. Starting with fiscal years that begin July 1, 2027, a district’s or city’s total transit levy cannot exceed 105% of last year’s amount. This limits how fast transit‑related property taxes can grow.

State fund pays elderly and disabled credits

Starting January 1, 2030, the state creates a fund to pay elderly and disabled property tax credits. The state must put in enough money each year to cover eligible claims. For one claimant group, each payment to a county cannot exceed the amount set by the formula in law.

Fuel taxes rise with inflation

Beginning January 1, 2027, motor fuel excise taxes adjust each year by CPI. Increases are capped at 3% and rounded to the nearest one‑tenth of a cent. There is no change if CPI is zero or negative, if rates rose three straight years before, or if the legislature and governor nullify the change by April 30.

Gas and diesel taxes track inflation

Motor fuel excise taxes adjust each July 1 to reflect CPI‑U increases. The department calculates the new rates and reports by January 15. An increase does not take effect if lawmakers nullify it by April 30, if CPI is not positive, or after three straight annual adjustments.

General homestead credit ended in 2026

For assessment years beginning January 1, 2026 and after, the general homestead credit under paragraph “c” is set to zero. Before, it covered the levy on the first $4,850 of value. Veterans who qualify under the veteran rule in paragraph “b” remain eligible.

Local sales tax can rise to 1.5%

Your county or city may set the local sales tax at 1.0% or 1.5%. You pay more only if your local government adopts 1.5%. If voters approve an updated purpose statement, any listed share for roads cannot go down.

New fees and taxes on EVs

Battery‑electric cars owe a $130 yearly fee, plug‑in hybrids owe $65, and electric or plug‑in hybrid motorcycles owe $9, all on top of normal registration. These EV fees adjust each July 1 if the CPI‑U rises; lawmakers can block an increase by April 30, and no increase happens if CPI is not positive or after three straight hikes. Public and commercial EV charging is taxed at $0.026 per kWh, and that rate can be adjusted under the law.

Revitalization areas still pay school taxes

If your property is in a revitalization area set up on or after July 1, 2024, any exemption does not apply to school district levies. The same rule applies if your first‑year exemption application is filed on or after July 1, 2024. This takes effect for assessments beginning January 1, 2027.

State backfill to locals ends in 2027

For budget years starting July 1, 2027, the state stops replacement payments that offset prior assessment limits. Local governments lose this funding stream. This can add pressure to local budgets and may affect services or local taxes.

New limits on school levies and bonds

The law changes limits for school physical plant and equipment levies and bond levies. Voter‑approved rates from before the division’s effective date are capped at 70% of the rate approved at election. For budget years starting July 1, 2027, districts can exceed physical plant limits only if they refunded or refinanced a qualifying loan; the extra authority ends when the loan matures. Bonds approved on or before November 4, 2025 and sold on or after May 1, 2026 follow the prior levy limits.

City general levies: caps and formulas

For fiscal years starting July 1, 2024 through June 30, 2027, a city’s general fund levy cannot be above the higher of $8.10 per $1,000 or the city’s adjusted rate. For the year starting July 1, 2027, cities use the higher of two formulas tied to last year’s certified levy and assessed value; a special rule applies if the current levy rate is zero. Starting July 1, 2028, if assessed value (without new valuation) grows 2% or more, a CPI‑based cap limits levy growth; for 2028 only, there is also a 101.5% minimum.

County levy floors and future caps

For fiscal years starting July 1, 2024 through June 30, 2027, the county general basic levy is at least $3.50 per $1,000 or the adjusted rate, whichever is higher. For the year starting July 1, 2027, counties use the higher of two formulas tied to last year’s levy dollars and assessed value. For years starting July 1, 2028 and after, counties must raise at least 101.5% of current levy dollars unless assessed value (without new valuation) grows 2% or more. If it does, a CPI‑based cap limits levy growth using set bands.

Homestead credit: occupancy and filing rules

You must live in the home on July 1 of the claim year and for at least six months in the calendar year that starts the budget year. If your parcel has more than one dwelling, the credit or exemption only covers the home and buildings you use. You must have recorded proof of ownership when you file the homestead statement. The homestead form now warns you to notify the assessor in writing if you change the property’s use. These homestead changes apply to assessment years starting on or after January 1, 2026. Section 25B.7(1) does not apply to the new homestead exemptions in section 425.1A.

Limits on special levies and debt

Starting July 1, 2026, cities and counties cannot use property‑tax‑backed bonds to fund day‑to‑day operations. For the year starting July 1, 2027, rate‑limited levies can be used only if in place for 2026 and are limited by a formula tied to 102% of current levy dollars, with at least 100.5% of 2026 dollars. From July 1, 2028 on, any entity allowed by law can use rate‑limited levies, but rates cannot exceed those later set by the legislature. Beginning July 1, 2027, county hospital and similar special levies are capped by a formula that uses 105% of current levy dollars divided by assessed value minus new valuation.

Rural county levies: floors and caps

For fiscal years starting July 1, 2024 through June 30, 2027, the rural county basic levy is at least $3.95 per $1,000 or the adjusted rate. For the year starting July 1, 2027, rural levies use the higher of two formulas tied to last year’s levy dollars and assessed value minus new valuation. From July 1, 2028 on, levies must raise at least 101.5% of current dollars unless assessed value (without new valuation) grows 2% or more, in which case a CPI‑based cap applies.

School levy drops; bond rules adjust

Starting July 1, 2027, the school foundation property tax rate is $4.48662 per $1,000 of value, down from $5.40. For districts that reorganize on or after July 1, 2027, the levy starts lower in year one and steps up in years two and three to the standard rate. On January 1, 2027, one bond‑levy section is repealed and wording on which debt levies are reduced is updated, which can affect future school tax calculations.

Tax breaks for improvements in revitalization zones

Beginning January 1, 2027, homes in a designated revitalization area can get a 100% tax exemption on the value added by qualifying improvements. Certain commercial or multiresidential buildings with 3+ units and at least 75% residential use can also qualify. In areas designated under section 404.1(5), up to $75,000 of added value is exempt for five years. Plans must state which property classes are covered, and counties cannot give these exemptions to commercial, multiresidential, or residential property inside city limits.

Lower school levy and funding overhaul

Starting July 1, 2027, the school foundation property tax rate drops to $4.48662 per $1,000 (down from $5.40). At the same time, the state raises the school foundation base to 100% of the state cost per pupil, increasing state aid. Before school districts get money from the secure an advanced vision for education fund, the law sets a fixed order of transfers, and after July 1, 2027 those amounts go to the state general fund to pay for the higher foundation aid. Several older aid streams and appropriations end for fiscal years starting July 1, 2027, including property tax adjustment aid, reorganization supplemental aid, replacement payments, and certain equity and supplement appropriations. A historical $24 million transfer amount remains in place only for budget years before July 1, 2027.

New rules for mobile home titles

Landowners can remove and store an unlawfully parked or abandoned mobile home if no lien exists other than a tax lien. A county treasurer may issue a new title for a valueless home; that cancels chapter 435 tax liens and ends the old owner’s interest. If you surrender a manufactured home title, the home still gets taxed under chapter 435 and cannot get homestead or military tax breaks. You can get a title or registration only if taxes under chapter 423 or 435 are not owing. County treasurers can collect manufactured and mobile home taxes like other county taxes.

Veteran homestead credit: new limits

If you choose the full veteran homestead credit, you cannot also claim other veteran property tax credits for the same home. Lists of people who get the veteran credit are confidential, though counties can show the credit on your parcel record and share with county veterans service officers. For applications on or after July 1, 2026, the homestead for this credit excludes appurtenances and is limited to one‑half acre.

New tax method for farm structures

For assessment years starting January 1, 2027, new non‑dwelling structures on farm land are not valued by farm productivity. They are valued at replacement cost minus depreciation and obsolescence, then multiplied by the agricultural factor. This can raise or lower your taxes depending on structure cost and county factors.

School tax from new data centers

For qualified data centers with site work starting on or after the law’s effective date, the school foundation property tax is not diverted into a city’s TIF fund. For taxes due in fiscal years beginning July 1, 2027, that tax is collected and paid to the school district.

Changes to road funding rules

If a local sales‑tax purpose statement that already sets a road share is changed and approved, the new statement must keep or raise the road share. Separately, the state lowers the rates used to calculate money for secondary roads, which can reduce county road funding. Changes to the related statutes take effect January 1, 2027.

Lifetime trout licenses for seniors, veterans

You can get a lifetime trout fishing license if you are 65 or older or if you qualify for the disabled veteran homestead credit. You must pay the fee, and the department must issue the license.

Better receipts for property tax payments

If you pay property tax in cash, the county treasurer must give you a detailed receipt. For other payments, you can ask for one. Counties must move last month’s collected taxes to the right funds by the 10th, with some partial‑payment exceptions. Interest and fees go to the county general fund and are reported to the auditor.

Fairer home values in assessments

Assessors must use fair market value based on normal sales and ignore or adjust abnormal sales. Examples include related‑party, foreclosure, sale‑leaseback, and built‑to‑suit sales. This applies to assessments starting January 1, 2027.

Solar installs won’t raise your assessment

If you install a solar energy system, your property’s actual, assessed, and taxable values cannot go up because of the system for five full assessment years. This applies to agricultural, residential, multiresidential, commercial, and industrial property. It starts with assessments on or after January 1, 2027.

Stronger guardrails on local tax budgets

Cities and counties must file budget information by 4:00 p.m. on March 5 each year or their taxes are capped at last year’s level. A levy cannot be certified until estimates are filed, required statements are mailed or posted, and public hearings are held. Starting in fiscal years that begin July 1, 2027, a specific county levy cannot pay assessor and review board expenses that must come from other funds.

Assessors face limits on business data requests

Assessors cannot ask owner‑operated commercial or industrial properties for sales, expense, bank, or other financial‑condition data. For low‑income housing under section 42, assessors must value based on actual rents unless the owner withdraws using required notice and timing rules.

Local budget notices can go online

For fiscal years starting July 1, 2027, local governments may post taxpayer budget statements online by March 15 instead of mailing them. They must keep current and prior‑year statements, and may use social media if they have it.

No property tax on disaster equipment

Property brought into the state to help with disaster response is not assessed for property tax if it leaves after the response period. The exemption applies only during the disaster response period.

EV registration fees rise with inflation

Starting January 1, 2027, extra registration fees for battery EVs, plug‑in hybrids, and electric motorcycles adjust each July 1 by CPI. Increases are capped at 3% and rounded to the nearest dollar. There is no change if CPI is zero or negative, if fees rose three straight years before, or if the legislature and governor nullify the change by April 30.

Some properties dropped from dividend formula

For assessments starting January 1, 2022, specific listed properties and some parcels with three or more units are excluded from the residential dividend calculation. This can reduce dividend amounts available to some homeowners and raise their net taxes.

Local budget and tax notices online

For budgets beginning July 1, 2027, your county or city may post budget and property tax statements online by March 15 instead of mailing them. If it uses social media, it must also post the statement or a link there by March 15. The Department of Management sets the standard forms and the public hearing notice that local governments must use.

Assessors ignore some unusual sales

For assessment years starting January 1, 2026, assessors may exclude or adjust more unusual sales when valuing property. Built‑to‑suit deals, sale‑leasebacks, leased‑fee sales, and related‑party sales count as abnormal transactions. This can raise or lower a home’s assessed value depending on local sales data.

Which homes stay exempt from some city taxes

For assessment years starting January 1, 2027, the law clarifies which residential parcels are exempt from the operation, capital improvement, and debt service taxes. Most residential parcels are exempt, but homes in historic districts or certain multiresidential classifications may not be. The cross‑references now point to the updated multiresidential category.

Clearer reporting on real estate transfers

When you transfer real estate, you must list any special facts that affect market value on the declaration‑of‑value form. The Department of Revenue provides examples. This helps assessors set fair values but adds some disclosure work for sellers.

Credit calculations use new school levy rate

For property taxes due in the fiscal year starting July 1, 2027, credits under chapters 425A and 426 must use the levy rate in amended section 257.3. This change takes effect January 1, 2027. Your credit amount may change based on the updated rate.

New rules for farm land credits

Beginning January 1, 2027, the state uses a new school levy reference to decide if family farm and agricultural land tracts qualify for credits. County auditors must list tracts by school district, compute any levy above the threshold with the new reference, and certify totals to the state by April 1. This can change which tracts qualify and the credit amount in some districts.

Rules for manufactured homes and trailers

If you own a manufactured home, you must report your address, township, and school district at titling or when you move it. Park owners must report arrivals and departures monthly and file a list by June 1 each year; it is delinquent after June 30. The state can cancel a mobile/manufactured home title that was issued while taxes were owed and still unpaid, after notice and a chance to pay. A travel trailer kept in storage, not lived in, and not moved on highways is exempt from the manufactured/mobile home tax.

County budget timing and code cleanup

One budget subsection now clearly applies only to years starting before July 1, 2027. Other amendments take effect for fiscal years beginning on or after July 1, 2027. Two county code subsections are repealed.

No property-tax bonds for operations

On and after July 1, 2026, cities and counties cannot issue property‑tax‑backed bonds to pay general operations. Small finance leases are exempt if their total principal is under 1.25% of the entity’s most recent general fund budget. The Department of Management will write rules to carry this out.

School fund distribution rules updated

Effective January 1, 2027, the law removes one clause from the secure an advanced vision for education fund’s distribution rules and strikes a subsection of section 298.2. These changes update how school funds are described and may affect future allocations.

Utility replacement tax study extended

The task force studying replacement taxes, including utility replacement taxes, continues its work through December 31, 2026. It reviews accuracy and ways to modernize and simplify administration. If it recommends changes, the Department of Management sends them to the legislature.

County fund transfer formulas updated

The law changes how counties compute transfers from general and rural services funds to the secondary road funds. It updates dollar‑per‑thousand equivalents and related ratios. This shifts how county dollars flow but does not set new household tax rates.

Lawmakers study property tax rates

During 2026 and 2027, a legislative committee studies property tax rates and how to raise residential and multiresidential assessments from 75% to 100%. The committee must report recommendations to the legislature by January 15, 2028.

Sponsors & Cosponsors

Sponsor

COMMITTEE ON WAYS AND MEANS
Affiliation unavailable

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 234 • No: 111

Senate vote • 5/3/2026

Passed Senate

Yes: 41 • No: 1

House vote • 5/2/2026

Passed House

Yes: 62 • No: 22

House vote • 4/22/2026