(Iowa Capitol Dispatch/Des Moines, Iowa) – As Republicans move forward with their proposal to overhaul Iowa’s property tax system, House Democrats introduced their own property tax relief proposal Thursday: a $1,000 rebate for all Iowa homeowners and $500 rebate for renters. In a news conference Thursday, Rep. Dave Jacoby, D-Coralville, ranking member of the House Ways and Means Committee, said both Republicans and Democrats heard on the campaign trail that property tax costs were one of the top concerns for Iowans across the state. But he said the Republicans’ plan, House Study Bill 313 and Senate Study Bill 1208, will not necessarily guarantee lower property tax costs.

Jacoby said the Democrats’ bill, House File 691, would provide immediate relief through rebates, which would be funded using the Taxpayer Relief Fund, which currently holds $3.75 billion. Democrats also released another bill, House File 916, to expand the existing Homeowner Property Tax Credit, which freezes property tax rates, to all seniors over age 65.

House Speaker Pat Grassley told reporters Thursday that he had concerns about using the Taxpayer Relief Fund, which contains one-time money, for these rebates, as these funds will also be used to implement the income tax cuts enacted by Republicans in recent years.

The GOP bill, proposed by Ways and Means chairs Rep. Bobby Kauffman, R-Wilton and Sen. Dan Dawson, R-Council Bluffs, would remove Iowa’s “rollback” system that limits how much the aggregate taxable value of properties can grow each year. It would move the state to a “revenue-restricted” system, where taxable property value can grow by a larger margin, but would set new limits on how much local property tax levy rates can increase each year and how much new tax revenues could be collected by local governments.

Jacoby said the rollback system was first introduced in the 1970s as a way to lower property taxes in the face of the farm crisis and high inflation. He said as inflation remains a current concern, removing this system could lead to even higher costs for property owners especially as property valuations would be roughly doubled by removing the rollback. The residential property rollback rate was 47.4% in fiscal year 2026, meaning for a $100,000 home, only roughly $47,400 would be taxed.

Jacoby said while Democrats support making changes to Iowa’s property tax system, lowering property taxes would have to involve providing state funding for costs that were shifted to local governments through the 2013 property tax legislation signed by former Gov. Terry Branstad. While state lawmakers had agreed at that time to backfill costs related to issues like health and public safety costs, Jacoby said the state did not end up providing funding for these measures, leading to higher property taxes.

He said a similar problem could arise with this year’s bill, which proposes shifting $426 million funding for K-12 schools currently paid for using property taxes to the state.  Speaker Grassley said Republicans were committed to providing the education funding contained in the property tax bill if it were to pass. He also emphasized that conversations were still ongoing on the Republican property tax proposal and that “no bill right now is set in stone.”