Iowa House Bill HF565

Iowa 2025-2026 Regular Session

• Introduced: 2/24/25
• Refer: 2/24/25

Caption

A bill for an act establishing a partial exemption on property taxes for certain residential properties sold in disaster areas.(See HF 1013.)

Summary

HF 565 would create a new partial property tax exemption for certain residential properties purchased from the U.S. Department of Housing and Urban Development (HUD). The exemption applies only when the property was sold to provide housing after a major disaster or disaster emergency, and only if the property is located in the federally declared disaster area or a state disaster emergency area. To qualify, the owner must already be receiving the homestead tax credit on the property. The exemption would last for four assessment years after the sale and phase down each year: 80% of actual value in the first full assessment year, 60% in the second, 40% in the third, and 20% in the fourth. After that, the exemption expires. The bill amends Iowa Code section 427.1 to add this new category of partial exemption, reducing the taxable value of eligible properties during the recovery period following a disaster.

Impact

The bill would change Iowa property tax law by adding a new partial exemption category for a narrow class of residential properties acquired from HUD in disaster-related sales. It would affect local property tax collections by temporarily lowering the taxable value of qualifying homes, while providing tax relief to owners who use these properties to house people displaced by disasters. The bill would also interact with existing homestead tax credit provisions and the state’s disaster-emergency framework.

Sentiment

The available legislative record suggests generally favorable treatment of the bill. It received a unanimous 24-0 committee report from the House Committee on Appropriations, indicating no recorded opposition at that stage. However, the bill was later withdrawn, so it did not advance to enactment in the available record. No committee transcript discussion was provided, limiting insight into broader debate.

Contention

No specific points of contention are documented in the available materials. Based on the bill text, possible areas of concern would have been the fiscal effect on local governments from reduced property tax revenue, the narrow eligibility criteria tied to HUD sales and homestead credit status, and whether the benefit should be limited to four years. Because there are no transcripts, it is not possible to attribute these concerns to any particular legislator or stakeholder.