(Des Moines, Iowa/Iowa Capital Dispatch) – The Republican leaders of the Iowa Legislature’s tax committees released their property tax proposal Thursday. Rep. Bobby Kaufman, R-Wilton and Sen. Dan Dawson, R-Council Bluffs, chairs of the House and Senate Ways and Means committees, respectively, introduced legislation that they said in a news release would be “the biggest property tax system overhaul since the 1970s.”

The measure, introduced as House Study Bill 313 and Senate Study Bill 1208, makes multiple changes to Iowa’s system of property taxes that the lawmakers said would provide an estimated $426 million in property tax cuts. The bill would move Iowa’s local property tax system away from assessing properties using rollbacks — a method where the taxes based on the assessed market value of a property is limited based on the statewide aggregate property values. Instead, Iowa would use a “revenue-restricted system,” Dawson told reporters Thursday.

The bill would create a new schedule of assessment limitations and a 2% growth factor restriction, based on the fiscal year’s actual property tax dollars that have been certified for a local property tax levy. While the change would mean property owners pay more taxes based on the value of their property, Dawson said the revenue restriction “buys down that rate.” The system change would be phased in over five years. Kaufmann said the change would help address problems local governments have with the rollback system and would provide more certainty for local jurisdictions as they plan budgets over the long term.

Sen. Dan Dawson, R-Council Bluffs and Rep. Bobby Kaufman, R-Wilton talk to reporters March 6, 2025, about their proposal to make changes to Iowa’s property tax system. (Photo by Robin Opsahl/Iowa Capital Dispatch)

The system also shifts funding from Iowa’s system of tax credits back to the state, which Kaufmann said would go toward about $400 million in school funding coverage through the state that is currently allocated through local property taxes. Other components in the legislation include a $25,000 property tax exemption for homesteads and a property tax freeze for seniors over age 70 who have incomes at 250% or less than the federal poverty level.

The legislation has been anticipated as Republican leaders at the Statehouse have repeatedly stated that property tax changes will be a top priority in the 2025 session. The lawmakers said the new measure builds off of the 2023 property tax law that capped levy rates for cities and counties. Rep. Dave Jacoby, D-Coralville, said Iowans should be “extremely skeptical” about the property tax proposal.

“Over the last decade, every attempt by GOP lawmakers to fix Iowa’s property tax system has failed,” Jacoby said in a statement. “Property taxes just keep going up every year, especially for homeowners. House Democrats believe we need to put money back in the pockets of homeowners and renters immediately.”

While the measure was introduced Thursday, there will likely not be movement on the bill through the committee process for several weeks. Kaufmann said the bill was introduced this week in order to give time to local governments, schools and other impacted entities to review the legislation and give feedback to lawmakers on how best to proceed with potential changes.