Property Taxes in Iowa

Effective Rate

Iowa's average effective property tax rate is approximately 1.29%–1.34% of assessed home value (Tax Foundation: 1.33%; SmartAsset: 1.29%; TaxByCounty: 1.34%), which is well above the national average — roughly 40-50% higher than typical national averages cited around 0.89%-0.99%. This makes Iowa one of the higher-property-tax states in the country (property taxes make up 32.3% of Iowa's state/local tax revenue vs. 28.9% nationally, per Tax Foundation). Rates vary significantly by county, from about 0.92% (Lyon County) up to roughly 1.79% (Montgomery County), driven by local school, city, and county levies.

Example: Estimates for the statewide median annual property tax bill cluster around $2,160-$2,897, with commonly cited figures near $2,542 (about $142 above the cited national median of $2,400) and other estimates around $2,897/year on a home valued near $208,000. County-level medians vary widely, from about $2,744 to nearly $4,950 per year in higher-cost counties like Dallas County (median home value ~$391,300). Note: source estimates differ because they use different home-value baselines and time periods, so treat any single number as an approximation rather than an official statewide median.

Exemptions

Homestead Tax Exemption (replaced the former Homestead Tax Credit, effective assessment year 2026 under SF 2472, signed by Gov. Reynolds May 18-19, 2026)

Amount: 10% of taxable value, with a minimum exemption of $5,500 and a maximum of $20,000 in taxable value

Applies automatically to eligible owner-occupied homes; homeowners who previously had the old homestead credit were transitioned automatically without refiling. The maximum will adjust for inflation starting in 2027. This is a much larger benefit than the old credit, which only offset taxes on $4,850 of value.

Senior (Age 65+) Homestead Exemption

Amount: Additional $6,500 of taxable value exempted, on top of the standard homestead exemption

Available to claimants age 65 or older as of January 1 of the assessment year; once granted it continues in future years without needing annual reapplication.

Disabled Veteran Homestead Tax Credit

Amount: 100% exemption of the home's assessed value from property tax for qualifying disabled veterans (unchanged/preserved by the 2026 legislation)

Preserved as-is under SF 2472 even though the regular homestead credit was restructured into an exemption; eligibility generally requires a 100% permanent and total disability rating tied to military service.

Iowa overhauled its property tax system in 2026 (SF 2472, signed by Gov. Kim Reynolds on May 18, 2026), replacing the old flat Homestead Tax Credit with a percentage-based Homestead Tax Exemption and projecting about $4.2 billion in homeowner savings over six years. Because this change is retroactive to assessment year 2026, its real dollar impact will first show up on tax bills paid in September 2027 and March 2028 — so homeowners won't see the new, larger exemption reflected in their tax bill until then, even though the assessed-value reduction applies now. Always verify current-year exemption amounts and eligibility with the Iowa Department of Revenue (revenue.iowa.gov) or the local county assessor, since inflation adjustments begin in 2027 and additional local credits (military exemption, family farm credit, etc.) may also apply.

Facts on this page reflect research current as of 2026-07-05. Programs, rates, and laws change — confirm current figures with the relevant state agency before relying on them.

Related Resources

Down Payment Assistance in Iowa Transfer Tax & Closing Costs in Iowa Buyer-Agent Agreements in Iowa Seller Disclosure Laws in Iowa Find Agents in Iowa Home Affordability Calculator