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Read. Follow. Verify.Iowa Senate Passes Property Tax Reform Bill Overhauling Local Levies, School Funding, and Assessment Caps
Last action · June 16, 2025: Referred to Ways and Means. S.J. 1058 .
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What This Bill Would Do
Senate File 651 overhauls local government property taxes, city and county financial authority, school funding formulas, and property assessment caps starting in 2026. The bill transitions school regular program s to 100 percent, restructures property tax levy limits for cities, counties, and special districts, and replaces traditional homestead tax credits with exemptions.
Property owners across Iowa will experience shifted tax rates, altered assessment limitations across various property classes, and restructured homestead tax relief mechanisms affecting local government and school district revenues beginning January 1, 2026.
- Iowa property taxes are subject to statutory assessment limitations (known as rollbacks) and levy rate caps designed to limit year-over-year revenue growth for local taxing authorities. context
- The Iowa General Assembly frequently introduces comprehensive property tax reform measures to address residential and commercial valuation shifts and school district funding equalization. context
Who It Would Affect
Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.
Property owners
Property owners experience changes in assessment roll percentages, homestead tax exemptions, and modified local property tax levy limits.
School districts
School districts face altered foundation property tax rates, 100 percent foundation base funding adjustments, and new management levy fund balance reporting requirements.
Local governments (Cities and Counties)
Cities and counties are subject to new levy rate restrictions tied to consumer price indices and are prohibited from issuing general obligation bonds for general operations.
Disabled veterans
Disabled veterans retain 100 percent homestead tax credits under newly defined application guidelines and acreage limitations.
Key Facts
- Increases the regular program foundation base per pupil and special education support services foundation base to 100 percent of the state cost per pupil starting July 1, 2026.
- Reduces the school foundation property tax levy to $4.48662 per $1,000 of assessed valuation for budget years beginning on or after July 1, 2026.
- Establishes new budget adjustment factor limits for county general services and rural services property tax levies starting in fiscal year 2026.
- Replaces standard homestead property tax credits with a 25 percent taxable value exemption (not to exceed $125,000) for assessment years beginning on or after January 1, 2025.
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- Increases the military service property tax exemption to $5,000 for 2025, $6,000 for 2026, and $7,000 for assessment years beginning on or after January 1, 2027.
- Re-establishes the multiresidential property classification for assessment years beginning on or after January 1, 2026, phasing its assessment percentage up to 100 percent by 2036.
- Prohibits cities and counties from issuing bonds or other indebtedness payable from ad valorem property tax levies to fund general operations on or after July 1, 2025.
- Increases the household income eligibility threshold for the elderly property tax credit from less than 250 percent to less than 300 percent of the federal poverty level.
- Lowers the regional transit district property tax levy maximum from $0.95 to $0.80 per $1,000 of assessed value starting in fiscal year 2026.
- Requires school districts with excess unexpended fund balances in their management levy funds to certify balances to the school budget review committee by November 15, 2025.
Frequently Asked Questions
How does this bill change school funding property taxes?
What changes are made to the homestead tax credit?
Can cities and counties use bonds to fund general operations?
What else do you want to know?
News Coverage
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Votes, people, money & the original sourceWhere This Stands
Currently passed chamber. The next step in the legislative lifecycle is Law.
Procedural history
13 actions- Jun 16, 2025SenateCommitteeReferred to Ways and Means. S.J. 1058 .
- May 8, 2025Iowa LegislatureCommittee report approving bill, renumbered as SF 651 .
- May 8, 2025SenateCommittee report, approving bill. S.J. 946 .
- May 8, 2025SenateIntroducedIntroduced, placed on Ways and Means calendar. S.J. 946 .
- May 7, 2025Iowa LegislatureSubcommittee recommends amendment and passage.
- May 6, 2025Iowa LegislatureSubcommittee Meeting: 05/07/2025 8:00AM Room G15.
Show 7 earlier actions
- Apr 28, 2025Iowa LegislatureSubcommittee reassigned: Dawson, Driscoll, Petersen, Rowley, and Winckler.
- Apr 10, 2025Iowa LegislatureSubcommittee reassigned: Dawson, Driscoll, Petersen, Schultz, and Winckler.
- Apr 10, 2025Iowa LegislatureSubcommittee: Dawson, Petersen, Rowley, Schultz, and Winckler.
- Apr 10, 2025Iowa LegislatureSubcommittee reassigned: Dawson, Driscoll, Petersen, Schultz, and Winckler.
- Apr 9, 2025HouseSubcommittee: Kaufmann, Bloomingdale, McBurney, Wilson and Wulf. H.J. 920 .
- Apr 9, 2025HouseIntroducedIntroduced, referred to Ways and Means. H.J. 920 .
- Apr 9, 2025Iowa LegislatureIntroducedIntroduced, referred to Ways and Means.
Version history
Only one version on file - nothing to compare yet. As later stages (committee substitute, engrossed, enrolled) are captured, the redline appears here.
View official text →Lobbying Activity
No state lobbying filings in our records match this bill. Federal lobbying reports (LDA) cover Congress, so they are not listed on state bills.
Full breakdown
Who this bill affects and the strongest case for and against it, written only from the bill’s own text.
Discoveries
Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.
Transition from Tax Credits to Tax Exemptions for Homesteads
The bill systematically replaces standard homestead tax credit reimbursements with a percentage-based taxable value exemption structure starting in assessment year 2025.
Elimination of Property Tax Replacement and Equity Fund Transfers
Multiple statutory funds such as the property tax equity and relief fund and foundation base supplement fund are redirected or stripped of annual appropriations in favor of direct state general fund support for school foundation bases.
Connected Entities
Sources
www.legis.iowa.gov
Analysis Score
0–100- Significance95How much this matters to a regular citizen
- Controversy85Intensity of disagreement among stakeholders
- Entertainment10Compellingness for a non-policy-wonk reader
- Buzz75Current news / social attention level
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