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Tax credits

Iowa Property Tax Credits Overview

Homestead Credit
First enacted in April of 1937, its purpose was two-fold: primarily to alleviate some tax burden on home owners during the Depression; second, to encourage ownership in the State. For FY2014 the state legislature has appropriated $138 million to fund this credit. 100% payment of this credit is mandated to county governments. In the past the state has not fully funded this credit, which effectively forced counties to levy for an unfunded credit. This year the state has fully funded the credit so counties do not bear the responsibility of making up the unfunded balance.

Eligibility

The resident-owner, or surviving spouse, filing for the credit must live in the dwelling house on July 1 and for at least six months of the year for the homestead to be eligible. Second homes and/or investment properties are not eligible for this credit.

Calculations

The value of the credit varies by taxing jurisdiction due to varied tax rates. It is based on the amount of property tax due on the first $4,850 of the homestead’s value.

EXAMPLE: If your total tax rate is $30/1000 then calculate your credit as follows:
$30/1000 x $4,850 = $145.50
- The minimum credit is $62.50, thus if the calculated values less than that should be rounded up to $62.50.

Procedure

The owner of the homestead...



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