Iowa House and Senate have reached a major agreement on property tax reform and sent the bill to Governor Kim Reynolds for signature.

The compromise legislation (amended SF 2472) passed the Senate 41-1 and the House 61-22 on the final weekend of the 2026 session.

Here’s What’s in the Deal:

•  2% hard cap on annual property tax revenue growth for cities and counties (with higher limits for some services like EMS and hospitals)

•  Homestead exemption replacing the current tax credit — delivering clearer, more direct relief for homeowners (roughly 10% of taxable value)

•  $175 million in new state funding for schools to ease the burden on local property taxes

•  Gradual changes to how multi-family/apartment properties are taxed

•  Measures to encourage local government efficiency

Supporters say this package could save Iowa homeowners around $4 billion over the next six years by slowing tax growth and shifting more costs to the state.

Republicans are calling it meaningful reform that puts taxpayers first and brings predictability. Some Democrats argue it’s not enough and won’t deliver big enough reductions for many families, especially renters who could feel indirect effects.

This builds on earlier property tax relief efforts and was a top priority this session.

What’s next? Governor Reynolds is expected to sign the bill. Local governments will now need to adjust budgets under the new caps.

Property taxes have been a hot issue for Iowa families dealing with rising costs — this aims to bring some relief and stability.

What do you think — enough reform or more work needed? Drop your thoughts below 👇

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