(Radio Iowa) – Senate Republicans are introducing a property tax plan on this first day of the 2026 legislative session — a plan that injects new ideas into the debate over how best to reduce residential property tax rates. Senate Majority Leader Mike Klimesh. “Real meaningful property tax relief requires the will to disassemble that system completely down to its bare bones and then rebuild in a way that we can provide real, sustainable relief for Iowans that are concerned about their property taxes and, inevitably in the end, in their ability to stay in their home without being priced out of it from property taxes,” Klimesh says.

Senator Dan Dawson, a Republican from Council Bluffs, is chairman of the Senate Ways and Means Committee and the plan’s main architect. “It’s not a tweak. It’s a total overhaul,” Dawson said. “Our viewpoint has always been that the greatest vehicle to build wealth for the middle class is home ownership.” The bill would permanently increase the state’s homestead tax credit to 50 percent of a home’s taxable value. And it would eliminate property taxes for older Iowans who own their home.

“We want to make sure the middle class can own their own home to the end and not pay rent to the government forever,” Dawson said, “so in this new proposal once your house is mortgage clear and once you’re above the age of 60, your involuntary property taxes will be eliminated, so ultimately in the end this bill can be real relief.”

Two elements of the plan would offset property tax revenue losses in city and county budgets. Local governments could go to voters and ask to increase the local option sales tax to one-and-a-half percent. It’s max today is one percent. The Senate Republicans are also proposing to add an inflation index to the state gas tax, which hasn’t been raised in a decade.

“If we want to deliver real property tax relief and steep property tax relief to Iowans, we have to consider off-setting some of those losses because we still do have local, important serves that need to be provided,” Dawson says. The plan has other elements, like eliminating several state-funded property tax exemptions and sending that state money to public schools — to reduce the amount property owners pay to their local school districts.

Governor Kim Reynolds has said she’ll present a property tax plan to legislators. House Republicans are expected to unveil their own approach and a key House lawmaker has indicated it will focus on limiting city and county budget growth.