Homestead Tax Credit and Exemption

How it works

Iowa’s homestead benefit is a property tax relief program for owner-occupied homes. The Department of Revenue says the old homestead tax credit was replaced by a homestead tax exemption equal to 10% of the taxable value of the homestead.

What the money covers

This is a property tax benefit rather than a disaster or mitigation payment. It reduces the taxable value of a qualifying homestead, which lowers the amount of property tax due.

Amounts and matching

The Department states the exemption amount is 10% of the taxable value of the homestead, with a minimum amount of $5,500 in taxable value and a maximum amount of $20,000 in taxable value. The page notes that the change is retroactive to assessment year 2026 and will affect property taxes paid in September 2027 and March 2028. It also says the maximum assessment amount will be adjusted for inflation beginning with assessment years on or after January 1, 2027.

How to apply

Claimants currently receiving the homestead tax credit do not need to refile if they continue to meet eligibility criteria.

Timing and deadlines

The page explains that the new exemption replaces the prior credit beginning with assessment year 2026.