Senate File 29 - Introduced SENATE FILE 29 BY McCLINTOCK A BILL FOR An Act relating to property tax exemptions by changing the 1 homestead tax exemption to a credit for owners attaining 2 sixty-five years of age and increasing the military service 3 tax exemption, and including effective date and retroactive 4 applicability provisions. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 1119XS (3) 91 jm/md
S.F. 29 DIVISION I 1 HOMESTEAD TAX CREDIT FOR ELDERLY OWNERS 2 Section 1. Section 425.1A, subsection 1, paragraph b, Code 3 2025, is amended to read as follows: 4 b. For the assessment year beginning January 1, 2024 , and 5 each succeeding assessment year, the eligible homestead, not to 6 exceed six thousand five hundred dollars in taxable value. 7 Sec. 2. Section 425.17, subsection 2, paragraph a, 8 subparagraphs (1) and (3), Code 2025, are amended to read as 9 follows: 10 (1) A person filing a claim for credit under this subchapter 11 who has attained the age of sixty-five years but who has 12 not attained the age of seventy years on or before December 13 31 of the base year, a person filing a claim for credit or 14 reimbursement under this subchapter who is totally disabled 15 and was totally disabled on or before December 31 of the base 16 year, or a person filing a claim for reimbursement under this 17 subchapter who has attained the age of sixty-five years on or 18 before December 31 of the base year and who is domiciled in 19 this state at the time the claim is filed or at the time of the 20 persons death in the case of a claim filed by the executor or 21 administrator of the claimants estate. 22 (3) A person filing a claim for credit under this subchapter 23 who has attained the age of seventy sixty-five years on or 24 before December 31 of the base year , who has a household income 25 of less than two hundred fifty percent of the federal poverty 26 level, as defined by the most recently revised poverty income 27 guidelines published by the United States department of health 28 and human services, and is domiciled in this state at the time 29 the claim is filed or at the time of the persons death in the 30 case of a claim filed by the executor or administrator of the 31 claimants estate. 32 Sec. 3. Section 425.23, subsection 1, paragraph c, 33 subparagraph (2), Code 2025, is amended to read as follows: 34 (2) The If the claimant has attained the age of seventy 35 -1- LSB 1119XS (3) 91 jm/md 1/ 4
S.F. 29 years on or before December 31 of the base year, has a 1 household income of less than two hundred fifty percent of the 2 federal poverty level, as defined by the most recently revised 3 poverty income guidelines published by the United States 4 department of health and human services, and is domiciled in 5 this state at the time the claim is filed or at the time of the 6 persons death in the case of a claim filed by the executor or 7 administrator of the claimants estate, the difference between 8 the actual amount of property taxes due on the homestead during 9 the fiscal year next following the base year minus the actual 10 amount of property taxes due on the homestead during the first 11 fiscal year for which the claimant filed a claim for a credit 12 calculated under this paragraph c and for which the property 13 taxes due on the homestead were calculated on an assessed 14 valuation that was not a partial assessment and if the claimant 15 has filed for the credit calculated under this paragraph c 16 for each of the subsequent fiscal years after the first credit 17 claimed. 18 Sec. 4. Section 425.23, subsection 1, paragraph c, Code 19 2025, is amended by adding the following new subparagraph: 20 NEW SUBPARAGRAPH . (3) Six thousand five hundred dollars. 21 Sec. 5. EFFECTIVE DATE. This division of this Act, being 22 deemed of immediate importance, takes effect upon enactment. 23 Sec. 6. RETROACTIVE APPLICABILITY. This division of this 24 Act applies retroactively to assessment years beginning on or 25 after January 1, 2025. 26 DIVISION II 27 MILITARY SERVICE TAX EXEMPTION 28 Sec. 7. Section 426A.11, subsection 2, paragraph b, Code 29 2025, is amended to read as follows: 30 b. The property, not to exceed four thousand dollars in 31 taxable value for the assessment years beginning on or after 32 January 1, 2023, but before January 1, 2025, of an honorably 33 separated, retired, furloughed to a reserve, placed on inactive 34 status, or discharged veteran, as defined in section 35.1, 35 -2- LSB 1119XS (3) 91 jm/md 2/ 4
S.F. 29 subsection 2 , paragraph a or b . 1 Sec. 8. Section 426A.11, subsection 2, Code 2025, is amended 2 by adding the following new paragraph: 3 NEW PARAGRAPH . c. For assessment years beginning on or 4 after January 1, 2025, the property of an honorably separated, 5 retired, furloughed to a reserve, placed on inactive status, or 6 discharged veteran, as defined in section 35.1, subsection 2, 7 paragraph a or b , equal to the lesser of the actual value 8 of the property and an amount equal to four thousand dollars 9 divided by the quotient of the propertys consolidated levy 10 rate per one thousand dollars divided by one thousand dollars. 11 Sec. 9. IMPLEMENTATION. Section 25B.7 does not apply to the 12 exemption in this division of this Act. 13 Sec. 10. EFFECTIVE DATE. This division of this Act, being 14 deemed of immediate importance, takes effect upon enactment. 15 Sec. 11. RETROACTIVE APPLICABILITY. This division of this 16 Act applies retroactively to assessment years beginning on or 17 after January 1, 2025. 18 EXPLANATION 19 The inclusion of this explanation does not constitute agreement with 20 the explanations substance by the members of the general assembly. 21 This bill relates to property tax exemptions by changing 22 the homestead tax exemption for certain elderly persons to a 23 credit for owners attaining 65 years of age and increasing the 24 military service tax exemption. 25 DIVISION I HOMESTEAD TAX CREDIT FOR ELDERLY OWNERS. Under 26 Code section 425.1A, the homestead tax exemption for owners 27 attaining 65 years of age shall not exceed $6,500 of taxable 28 value. Owners attaining the age of 65 and 70 years of age, 29 respectively, are also eligible for an additional credit if 30 the owner meets certain income requirements under Code section 31 423.23. 32 The bill changes the homestead tax exemption for owners 33 attaining the age of 65 years from a $6,500 exemption to a 34 credit of at least $6,500 on the actual taxes payable on an 35 -3- LSB 1119XS (3) 91 jm/md 3/ 4
S.F. 29 eligible homestead. 1 The bill makes conforming changes to the additional credit 2 in Code chapter 425, subchapter II. 3 The division takes effect upon enactment and applies 4 retroactively to assessment years beginning on or after January 5 1, 2025. 6 DIVISION II MILITARY SERVICE TAX EXEMPTION. Under 7 current law, all honorably discharged veterans are entitled to 8 a property tax exemption of $4,000 in taxable value. The bill 9 increases the property tax exemption amount to an amount that 10 is equal to the lesser of the actual value of the property and 11 an exemption amount that is equivalent to a $4,000 credit on 12 the actual taxes payable on a property owned by an eligible 13 veteran. 14 Code section 25B.7 does not apply to the division, and as 15 a result, a political subdivision is required to extend the 16 credit to eligible veterans. 17 The division takes effect upon enactment and applies 18 retroactively to assessment years beginning on or after January 19 1, 2025. 20 -4- LSB 1119XS (3) 91 jm/md 4/ 4