Bills to overhaul Iowa’s property tax system were developed, but not adopted during the now-concluded 2025 Iowa legislature. House Speaker Pat Grassley says the goal now is to act in 2026.
“The frustrations I’m hearing, hopefully those are being expressed at the local level,” Grassley said this weekend during an appearance on Iowa Press on Iowa PBS. “This is – a lot of it – is about local taxation, local spending. That being said, I think it has risen to the level where the legislature cannot just sit here and not do something to try and make the system better.”
Grassley said lawmakers in the past have put “minor Band-Aids” on the property tax system, so he and others working on a “comprehensive approach” want to ensure an adjustment in one area doesn’t create problems in other areas. “If we don’t know what a massive overhaul would actually impact our constituents, we shouldn’t just rush something through,” Grassley said.
Representative Bobby Kaufmann, the Republican who leads the House Ways and Means Committee, said lawmakers will spend the next eight months “perfecting” the plan that’s already gone through several adjustments over the past few months. “It takes time to funnel through those, so we’re meeting with the cities and the schools and the counties and the hospitals and the community colleges and the taxpayers,” Kaufmann told reporters, “… developing the proper policy for what will become, I believe, the single biggest bill of the 2026 session.”
Senator Dan Dawson, the Republican who leads the Senate Ways and Means Committee, said lawmakers are “on the right path” and getting close to a final version. He indicated the key component is a limit on how much local government budgets can increase year to year. “If you just raise taxable value, that’s a property tax increase for everyone, but if you put a revenue restriction in place on all the taxing entities, the rates automatically collapse down,” Dawson said during a subcommittee hearing this month “and make lower rates for everyone.”
According to Grassley, lawmakers basically have two choices to make when it comes to property tax reform. “You’re going to have to pick a team here. Is it purely on Team Taxpayer or is it on Team Local Government?…I happen to land on the position that we have to be on the side of the taxpayer,” Grassley said. “…Not to say that this thing is going to be easy to fix, but we have to have more certainty in the system.”
House Democrats have proposed a $1000 property tax rebate for all Iowa homeowners and $500 rebates for renters over the next few years to give lawmakers time to develop “a true overhaul” of the system. Senate Democrats say they’re concerned schools will be shortchanged in the future since the plan calls for the state to provide $400 million more each year to Iowa’s public school districts.