Closing Costs in Iowa 2026: Buyer & Seller Guide
Insurers authorized in Iowa may not write title insurance (§ 515.48(10)). A state division, Iowa Title Guaranty, issues title coverage instead: $175 for residential coverage up to $750,000, on an updated abstract and an attorney’s title opinion. The seller is liable for transfer tax of 80 cents per $500 above the first $500.
Revenue stamps: 80 cents per $500, paid to the county recorder
The tax comes from Iowa Code chapter 428A. The rate is set in state law and is the same in every county. You pay it to the recorder in the county where the land sits, and the amount paid appears on the face of the deed (§ 428A.5). The county keeps 17.25% (§ 428A.8). Cities and counties can levy a tax only when a state law specifically authorizes it (§ 364.3(4), § 331.301(7)).
Scott County’s recorder lists the rate as 80 cents per $500 from July 1, 1991 to the present. The 2026 session left the rate sentence alone. Its chapter 428A changes amended the declaration-of-value rules (HF 2749, effective July 1, 2026, and SF 2472 for the form section, § 428A.7) and added an exemption for creditor assignments (SF 2497, effective January 1, 2027).
How the recorder computes it
Section 428A.1 charges “eighty cents for each five hundred dollars or fractional part of five hundred dollars in excess of five hundred dollars.” Take $500 off the price, divide by 500, round any fraction up, and multiply by $0.80.
| Price on the deed | $500 units above the first $500 | Tax |
|---|---|---|
| $250,000 | 499 | $399.20 |
| $250,100 | 500 (499.2 rounded up) | $400.00 |
| $400,000 | 799 | $639.20 |
The base is “the full amount of the actual sale price,” including any mortgage or lien the buyer assumes. If the deed states a dollar value for personal property sold with the house, such as appliances, that amount is subtracted first. If it doesn’t, the price is presumed to include it.
Who is liable, and the paperwork that rides with the deed
Under § 428A.3, the person who “grants, assigns, transfers, or conveys” the land is liable for the tax. That means the seller. Check how your purchase agreement assigns the charge. Until the tax is paid, a taxable deed stays unrecorded (§ 428A.4).
On a taxable sale, a declaration of value signed by at least one seller or buyer, or their agent, goes in with the deed. A groundwater hazard statement signed by a seller or the seller’s agent goes with it. It lists wells, burial sites, solid waste disposal sites, storage tanks, hazardous waste and septic systems. When none exist, the deed carries a one-line statement on its first page instead. The recorder does not record the declaration (§ 428A.1(3)) and charges no fee for the groundwater statement (§ 558.69(10)).
Deeds outside the tax include mortgages, deeds between husband and wife or parent and child “without actual consideration”, deeds between former spouses under a divorce decree, and deeds for $500 or less (§ 428A.2(2), (11), (16), (21)). An exempt deed is recorded with a signed statement claiming the exemption (§ 428A.4(1)).
Why Iowa uses Iowa Title Guaranty and an abstract
Section 515.48(10) lets an insurer authorized in Iowa take on extra risks the commissioner approves, “except title insurance or insurance against loss or damage by reason of defective title.” Section 535.8(3) calls this “the prohibition against the sale of title insurance.” ITG’s own program manual adds that the section “does not expressly prohibit an Iowa resident from purchasing title insurance from an out-of-state title insurance company.” The Iowa Finance Authority’s title guaranty division offers guaranties of Iowa titles and fixes its own charge (§ 16.91(1)). Before a guaranty issues, the division needs an abstract “brought up-to-date and certified by a participating abstractor” and “a title opinion issued by a participating attorney” (§ 16.91(6)).
Iowa Title Guaranty’s residential rate sheet, effective July 1, 2023, charges $175 for lender, owner, or simultaneous lender-and-owner coverage up to $750,000. Above that, add $1 per $1,000 over $750,000, priced on the certificate with the higher coverage. ITG’s owner page says owner coverage up to $750,000 is free when your lender obtains coverage at the same time. Owner coverage on a $900,000 cash purchase: $175 + $150 = $325.
Who can run the closing
Someone who “provides real estate closing services” without being a party to the deal is a closing agent (§ 535B.1) and needs a license from the Division of Banking (§ 535B.4(1)). Most of that chapter does not apply to banks and credit unions, to real estate brokers acting as brokers, or to Iowa attorneys whose conduct is regulated by the Iowa Supreme Court (§ 535B.2(1), (6), (8)).
Recorder fees and the septic inspection
Recording fees come from a statute that applies in every county: $5 per page, plus $1 per transaction for records management and $1 per transaction for the electronic land-record system (§ 331.604). A three-page deed costs $17.
If a home with one to four dwelling units runs on a private septic system, a DNR-certified inspector must inspect it before the transfer, and the recorder won’t take the deed without the report. If weather or another temporary physical condition prevents the inspection, the buyer can file a binding acknowledgment with the county board of health to have it done as soon as practicable and to handle any required repairs (§ 455B.172(11)). Exempt transfers include those to a spouse or a lineal relative, court-ordered transfers, and systems installed within the previous two years.
Iowa Finance Authority help with cash to close
IFA’s program pages, read September 24, 2026:
- FirstHome is for first-time buyers (no primary residence owned in the last three years), eligible military members, or purchases in targeted areas. Buyers get either a $2,500 grant or a second loan of up to 5% of the lower of price or appraised value, but not both. The price limit is $566,000, or up to $692,000 in targeted areas. 2026 income limits run from $102,100 to $171,360 depending on county and household size.
- Homes for Iowans is open to first-time and repeat buyers. It offers the 5% second loan, with a $171,360 income limit and a $692,000 price limit. It can’t be combined with FirstHome assistance.
- Military Homeownership Assistance is a $5,000 grant for eligible service members and veterans. It is taking reservations for fiscal year 2027 while funding lasts.
IFA announced three changes on September 17 for new reservations made on or after November 2, 2026. The 5% loan will be capped at $15,000, a new 3% option will pay up to $10,000, and the Plus grant will “no longer be available.” Start with mortgage pre-approval from an IFA participating lender, and check the cash gap with our down payment calculator and buying-power check.
Iowa deed, abstract and title-guaranty questions
I’m buying on an installment contract. When is the transfer tax paid?
When the deed is recorded. The contract itself is exempt (§ 428A.2(1)).
Do I need a new owner’s certificate if I refinance?
No. Iowa Title Guaranty says an existing owner certificate stays in effect through a refinance and ends when you sell. The new mortgage owes no transfer tax and pays the § 331.604 recording fee.
A home is sold to the seller’s daughter for $1. Is there transfer tax?
No. A deed with consideration of $500 or less is exempt (§ 428A.2(21)); it is recorded with the signed exemption statement.
The seller wants to skip the septic inspection because the system works. Can they?
Not on a covered transfer. The recorder can’t record the deed without the certified inspector’s report or the buyer’s binding acknowledgment (§ 455B.172(11)).
Iowa tools and neighbors: the Iowa real estate guide, homeowner insurance in Iowa, our payment calculator and refinance guide, the state-by-state closing cost list, and the Minnesota, Nebraska and Wisconsin pages.