Iowa Senate approves property tax reform plan with bipartisan support

DES MOINES, Iowa (Gray Media Iowa State Capitol Bureau) - The Iowa Senate approved a property tax reform plan that would change the state’s tax system over the next decade, though homeowners may wait to learn the full impact on their bills.

The bill passed 41-4 with support from both Democrats and Republicans. Republicans have made property tax reform a priority for the past two years.

The bill limits how much communities can take in property taxes overall to 2%, not counting new construction. Some exemptions apply.

The plan does not freeze property taxes for seniors 65 and older, but part of the value of their home would not be subject to property taxes.

Sen. Dawson said the homestead exemption would be 50% for all Iowans. “Once a homeowner reaches age 60, they would receive an additional 10%, increasing to 70% at age 70, 80% at age 80 and so on.”

Democratic Sen. Tony Bisignano said the bill is the legislature’s best chance at providing relief for Iowans.

“Today, we’re just really taking the first serious step in letting the House and the governor know what parameters we have,” Bisignano said. “And will things have to change and compromise? Yes. That’s the way it works.”

Dawson acknowledged the bill is not in its final form. It now heads to the House for consideration.

House Republicans have proposed their own property tax bill that would exempt the first $25,000 in assessed home value from property taxes.

The House and Senate would have to agree on the same plan before it could go to the governor with a chance to become law.