Democrats in the Iowa House are proposing a freeze on the property taxes Iowans 65 and older pay on their homes, plus a new cap on property tax increases. It would be a 4% annual limit on property tax increases.
“What Iowans would like to know is certainty in their tax liability and that’s what the flat tax that House Democrats are proposing gives them,” Representative Dave Jacoby of Coralville said, “which is really needed in a time when property and buildings — their taxable values are shooting through the roof.”
Until that new limit would take effect in 2027, House Democrats propose $1000 rebates for homeowners and $500 state rebates for renters in each of the next two years — plus the homestead credit would triple immediately. “We were looking at two things,” Jacoby said, “things that would be truly effective and things that would be immediate.”
Jacoby told reporters limiting Iowans’ residential property tax increases to four percent of less would let cities, counties and public school districts maintain critical services. A “great percentage” of Iowa seniors are on fixed incomes, according to Jacoby, and he said a freeze on the property taxes they pay will help them stay in their homes.
“We know that they’ve worked hard for 50 plus years,” Jacoby said. “Not that young people aren’t working hard, but we need to have a whole different program or matrix…helping people when they’re younger afford to buy a new house.”
House Minority Leader Brian Meyer recently told Radio Iowa Democrats will propose a significant increase in the Iowa Finance Authority’s down payment assistance program for first-time homebuyers.
Governor Kim Reynolds has indicated she’ll reveal her own property tax plan this month. The 2026 Iowa Legislative session begins next Monday and the governor will deliver the annual “Condition of the State” address — along with her legislative agenda — on Tuesday, January 13.
