A bill for an act creating a deduction available against the individual income tax for gross rent paid by a taxpayer, and including applicability provisions.
Summary
HF 435 creates a new individual income tax deduction for gross rent paid at arm’s length by a taxpayer for the right to occupy a homestead, including a manufactured or mobile home. The deduction also covers rent paid for land occupied by a manufactured or mobile home, up to one acre. The bill defines “homestead” for this purpose as a dwelling in Iowa rented and actually used as the taxpayer’s primary home, including a unit in a multi-dwelling property.
The bill applies beginning with tax years on or after January 1, 2026. In practical terms, it would reduce taxable income for qualifying renters, which could lower state income tax liability for individuals who pay rent on their primary residence. It would amend Iowa Code section 422.7, which governs subtractions from individual income tax, and would create a new rent-based subtraction in state tax law.
Impact
HF 435 would change Iowa’s individual income tax code by adding a subtraction for rent paid on a primary residence, including certain manufactured or mobile home arrangements. The affected statute is Iowa Code section 422.7, and the change would apply prospectively to tax years beginning January 1, 2026. The main beneficiaries would be renters, including residents of apartments, homes, and manufactured/mobile homes who meet the bill’s occupancy and arm’s-length payment requirements.
Sentiment
Based on the available record, the bill appears to have been introduced and referred to the House Ways and Means Committee without recorded debate, amendments, or votes. As a result, there is no documented committee or floor sentiment in the provided materials. The bill’s purpose suggests a generally renter-relief or tax-relief orientation, but the legislative record here does not show whether that was broadly supported or opposed.
Contention
No specific points of contention are documented in the provided transcripts or vote history. Potential issues that could arise from the bill’s text include the revenue impact of creating a new deduction, whether the benefit should be limited to primary residences, and how to verify arm’s-length rent payments and eligibility for manufactured or mobile home land rent. However, these concerns are not attributed to any particular legislator or stakeholder in the available record.