Budget & Taxes (Property Tax)

This bill establishes a new property tax assessment limitation specifically for commercial properties primarily used as licensed child care facilities. It allows the portion of a commercial property dedicated to child care to be assessed for tax purposes at the same rate as residential property, rather than the standard commercial rate. To qualify, facility owners must apply to their local assessor by July 1st of the assessment year, providing proof of their child care license and property details. This assessment limitation, effective for valuations beginning January 1, 2025, is also factored into state appropriations that help compensate local governments for certain assessment limitations.

HF 988 establishes catastrophic savings accounts for Iowa residents who own homes, effective January 1, 2026. This bill allows account holders to deduct contributions to these accounts from their state income tax, with lifetime limits tied to their homeowner's insurance premiums or the home's assessed value for self-insured individuals. Interest earned on these accounts is also tax-deductible. Funds can be withdrawn tax-free to pay deductibles for homeowner's insurance related to defined catastrophic events like floods or windstorms. However, withdrawals for non-qualified expenses are subject to state income tax and a 2.5% penalty.

HF 1013 establishes a temporary partial property tax exemption for certain residential properties. This bill directly affects individuals who purchase homes from the U.S. Department of Housing and Urban Development (HUD) in areas declared major disaster zones. To qualify, the property must be sold by HUD specifically to provide housing after a disaster, and the new owner must occupy it as their primary residence. The exemption applies for four assessment years, starting with the first full year after the sale, decreasing from 80% of the property's actual value in the first year to 20% in the fourth year.

HF 75 provides property tax relief for surviving spouses of emergency services members (including firefighters, police officers, correctional officers, and emergency medical providers) who died while on duty. To qualify, spouses must submit a sworn petition to their county board of supervisors with proof of line-of-duty death and a certification from the deceased’s agency, while meeting specific eligibility criteria. The bill disqualifies cases involving self-inflicted death, gross negligence, intoxication, or the spouse’s substantial contribution to the death. It applies retroactively to tax years beginning January 1, 2025, and allows tax abatement for the filing year and future years if eligibility continues.

This bill modifies Iowa county property tax rates for general and rural services. It sets new annual tax rate formulas based on assessed value, with specific calculations for fiscal years starting in 2024-2028. Key provisions include requiring counties to maintain tax revenue at 101.5% of the previous year's actual levy (for 2027-2028) and linking rate adjustments to changes in the consumer price index (CPI), using a "budget adjustment factor" that ranges from 102% to 105% based on CPI growth. These changes directly affect county governments' ability to set property tax levies for local services.