Iowa Republicans in charge of tax policy in the Iowa House and Senate released their proposal to provide property tax relief to Iowans on Thursday, March 6, fulfilling one of the caucus’ top priorities for this legislative session.

The bills, House Study Bill 313 and Senate Study Bill 1208, would bring the largest property tax reform to the state since 1977 and would bring more than $426 million in property tax relief.

The leaders of the House and Senate Ways and Means Committee, who handle tax policy, unveiled their identical proposals on Thursday.

The bills would limit tax levy increases, expand property tax credits, and eliminate the antiquated “rollback” system limiting property value assessment growth.

Rep. Bobby Kauffmann, R-Wilton, who leads the House Ways and Means Committee, said the bills offered, “big, bold reforms to Iowa’s property tax system.”

“We either needed to do something big, or do nothing at all,” Kauffmann said. “This proposal is the biggest overhaul to the property tax system in decades, puts Iowa homeowners first, brings much needed relief to property taxpayers, and puts restraints on local governments to limit spending while the system is updated and modernized.”

Among the biggest changes under the bill are a 2 percent property tax levy growth cap, excluding revenue from new construction, using state general fund dollars to replace $426 million in property taxes currently used to fund public schools, and phasing out the antiquated property tax rollback system that limits the amount of a property valuation that is taxable.

The amount of “rollback” on a properties assessed valuation is determined by the Iowa Department of Management each year to limit total assessed value growth in the state by 3 percent. The system was put in place 50 years ago, and lawmakers said it confuses property taxpayers.

The bill would also create a $25,000 homestead tax exemption for all residential property owners and raise the veteran property tax exemption from $4,000 to $7,000.

Republican lawmakers who are leading the reforms said the bill is nowhere near its final form and are looking to work with stakeholders in improving the bill before it is signed into law.

“We heard a lot from Iowans that rising property taxes continued to be an issue in their communities and are looking to the legislature for solutions,” said Sen. Dan Dawson, R-Council Bluffs, who leads the Senate Ways and Means Committee in a news release Thursday. “This solution, I believe, Iowans will support, cities and counties can support, and I am looking forward to the continued conversation about how we can rebuild this entire system to make it simpler and fairer, prioritize Iowa property taxpayers and their families, and help make Iowa a more competitive state.”

Lawmakers’ last reforms to the property tax system were in 2023, where lawmakers capped the amount of revenue growth that a local government could see from year to year and required excess funds be used to lower property taxes.