Des Moines, Iowa (RI) — Senate Republicans are introducing a property tax plan on this first day of the 2026 legislative session.
The plan injects new ideas into the debate over how to best reduce residential property tax rates, led by Senate Majority Leader Mike Klimesh.
Senator Dan Dawson, a Republican from Council Bluffs, is chairman of the Senate Ways and Means Committee and the plan’s main architect.
The bill would permanently increase the state’s homestead tax credit to 50% of a home’s taxable value, and it would eliminate property taxes for older Iowans who own their home.
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 1.5%. The max today is 1%.
The Senate Republicans are also proposing to add an inflation index to the state gas tax, which hasn’t been raised in a decade.
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.
KIWA Staff Photo
