Iowa Republicans have released three different plans to cut property taxes.
Now they must figure out which approach offers the best way forward .
It’s only the second week of the 2026 legislative session, but already Senate Republicans, Gov. Kim Reynolds and House Republicans have unveiled separate bills cutting property taxes they say have overtaxed Iowans.
“I think the positive sign is we’re all serious about starting it early,” House Speaker Pat Grassley, R-New Hartford, said Wednesday, Jan. 21, as he introduced his plan. “Already, the conversations that I’ve had with the Senate and the governor, we’re all very serious about this, and I think that’s why you’re seeing proposals out as early as you are.”
House Democrats, who are in the minority, have proposed their own tax cut plan.
Here’s how the plans compare.
What’s in Gov. Kim Reynolds’ property tax cut plan?
Reynolds’ property tax cut plan, rolled out in her Condition of the State address, would cap revenue growth for local governments at 2%.
Her bill, Senate Study Bill 3034, would exclude property taxes on new construction from the revenue growth cap and would contain exceptions for debt service and school funding.
“Spending is what drives taxes — always has, always will,” Reynolds said in her speech. “And the most reliable way to protect taxpayers is to limit the growth of government itself.”
Reynolds told the Des Moines Register that property taxes have been rising faster than inflation and that the revenue growth cap is “reasonable.”
Her plan would also change Iowa’s assessment system so home values are assessed every three years, rather than two. That would delay any property tax increases from rising home values.
And her plan would freeze property taxes for all Iowans aged 65 and older whose homes are valued at $350,000 or less.
Reynolds’ staff said her plan would equate to a $3 billion property tax cut for Iowans over six years, while reducing revenue growth for local governments by the same amount.
She’s also proposing creating tax-deductible savings accounts for first-time homebuyers.
To help local governments cut spending, Reynolds is pitching a $10 million grant program for local governments to implement new shared service models.
The bill also says that county treasurer, auditor and recorder positions would no longer be elected offices, and instead would be appointed by the board of supervisors.
Reynolds said supervisors need more flexibility over setting county budgets.
“We need to get them the flexibility and maybe focus on who we are putting in those positions and make the other ones not elected,” she said.
What’s in House Republicans’ property tax cut plan?
House Republicans are joining Reynolds’ push for a 2% cap on local government revenue growth.
Their proposal, House Study Bill 596, also exempts new construction from the revenue growth cap and would make exceptions for debt service and school funding.
It would create a new $25,000 residential tax exemption, meaning all residential properties would not be taxed on the first $25,000 of the assessed value of their home. Instead of targeting relief toward seniors, Grassley said that extends property tax relief to all Iowans.
And the bill says all bonds issued by schools and local governments that are payable with property taxes would need to be put to a vote and receive 60% approval.
Instead of the governor’s efficiency grant program, the House proposal would require Councils of Government, which are multi-jurisdictional organizations that work with cities and counties on regional priorities, to help local governments find efficiencies and cut waste.
The proposal also tweaks the informational mailer sent to property taxpayers to help them better understand what their tax dollars fund.
Rep. Carter Nordman, R-Dallas Center, who chairs the House Ways and Means Committee, said House Republicans’ plan “puts the Iowa taxpayer first.”
“This plan is not about protecting the status quo for taxing entities,” he said. “It’s about creating predictability and protecting the bank accounts of hardworking Iowans.”
What’s in Senate Republicans’ property tax cut plan?
Senate Republicans released their property tax cut proposal on the first day of the legislative session.
Senate Study Bill 3001 would also limit property tax revenue growth for local governments.
The legislation would have the state pick up the full cost of K-12 education, allowing school districts to lower their property tax levies.
And it would eliminate Iowa’s decades-old rollback mechanism, which limits a home’s taxable value, and replace it with a 50% tax exemption on Iowans’ primary homes, up to $350,000.
For Iowans 60 years old and older who have paid off the mortgage on their home, the bill would exempt 100% of the home’s value from property taxes by 2029.
The exemption would not apply to any voter-approved property tax levies and would only apply to the first half-acre of the person’s property.
The plan also would index Iowa’s gas tax revenue to inflation, allowing funding for the state’s roads and bridges to grow more over time.
It would raise the military service property tax exemption from $4,000 to $7,000 by 2028.
“There’s two approaches: You can nibble around the edges or you can tear a system that we’ve slapped Band-Aids on for 40 years and take it down to the chassis and rebuild it,” said Senate Majority Leader Mike Klimesh, R-Spillville. “And I always expect us to take it down to the chassis and rebuild it.”
What’s in House Democrats’ property tax cut plan?
House Democrats, who are in the minority with 33 seats in the 100-member chamber, have proposed their own property tax cut plan.
It would cap property tax increases at 4% a year and would freeze property taxes for Iowans 65 and older.
The plan also calls for giving a $1,000 rebate to every homeowner and a $500 rebate to every renter for two years before the 4% cap on tax increases takes effect.
The rebates would be covered using money from the Taxpayer Relief Fund, which currently holds about $4 billion.
House Democrats also want to triple the Homestead Tax Credit and have the state cover local police, fire and EMS retirement matches.
(This story was updated to add new information.)
Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at sgrubermil@registermedia.com or by phone at 515-284-8169. Follow him on X at @sgrubermiller.
Marissa Payne covers the Iowa Statehouse and politics for the Register. Reach her by email at mjpayne@registermedia.com. Follow her on X at @marissajpayne.
This article originally appeared on Des Moines Register: Iowa Republicans have 3 plans to cut property taxes. How they compare:
Reporting by Stephen Gruber-Miller and Marissa Payne, Des Moines Register / Des Moines Register
USA TODAY Network via Reuters Connect
