Some Iowans will get a new tax break going forward that was signed into law earlier this month. The Iowa new property tax break is aimed at seniors and veterans, who now have about six weeks left to apply for the exemption.
Iowa’s New Property Tax Break: Who Will Get It?
Iowa Gov. Kim Reynolds, earlier this month, signed into law a new property tax break. The legislation, House File 718, was approved with near-unanimous support in the Iowa Legislature.
The bill establishes a homestead tax exemption for residents 65 years or older. It must be noted that the exemption is in addition to the homestead tax credit. However, unlike the current credit, the state won’t reimburse the cost of the exemption to local governments.
Those 65 years or older (on or before January 1 of the assessment year) and own the home they live in could qualify for the new property tax break from Iowa. About 750,000 households claimed homestead tax credits in the fiscal year 2023. It is, however, not clear how many homes are owned by seniors.
The exemption amount is for $3,250 of taxable value for the assessment year starting Jan. 1, 2023, while for assessment years on or after Jan. 1, 2024, the exemption is for $6,500 of taxable value.
This new property tax break is estimated to result in a $50 million property tax cut statewide. A point to note is that the exemption reduces the property’s taxable value and must not be confused with the direct reduction in the property tax amount.
How To Apply
The Iowa Department of Revenue has changed the homestead tax credit exemption form to enable seniors to apply for the tax break. Applicants can find the application form at tax.iowa.gov/forms under the name Homestead Tax Credit and Exemption 54-028.
Applicants will have to provide their date of birth and certify that the information they provided is correct. Application forms must be submitted to the county assessor’s office by July 1 of the year in which the exemption is claimed. If a form is submitted after the due date, it will count as a claim for the following year.
If the Department of Revenue approves the exemption, that resident doesn’t need to reapply in future years, provided they meet the requirements.
In addition to seniors, the new law more than doubles the property tax exemption for veterans from $1,852 in taxable value currently to $4,000. Military veterans must also apply by July 1 to get the exemption.
Veterans currently receiving the exemption are not required to file a new application provided they or their spouse is the legal or equitable owner of the property (as of July 1) for which the exemption is allowed.
Military veterans can find the applications at tax.iowa.gov/forms under the name Military Service Property Tax Exemption 54-146.
This article originally appeared on ValueWalk
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