Iowa Homestead Exemption: Amount, Filing & Savings
Starting with assessment year 2026, Iowa’s general homestead tax credit is gone. In its place, Iowa Code § 425.1A exempts 10% of a homestead’s taxable value, never less than $5,500 and, for 2026, no more than $20,000, a cap indexed to inflation from 2027 (Senate File 2472, signed May 18, 2026). Owners 65 or older by January 1 take off up to another $6,500. The claim is Form 54-028, filed with your city or county assessor by July 1.
What Senate File 2472 changed
Until this year, § 425.1 gave “a credit against the tax on each eligible homestead in the state in an amount equal to the actual levy on the first four thousand eight hundred fifty dollars of actual value,” with a floor of $62.50. Division XX of SF 2472 (2026 Iowa Acts, chapter 1115) keeps that formula only “for assessment years beginning prior to January 1, 2026” and adds a new § 425.1A(1A):
“For the assessment year beginning January 1, 2026, and each assessment year thereafter, an exemption from taxation of ten percent of the taxable value, but not less than an exemption of five thousand five hundred dollars in taxable value and not to exceed an exemption of twenty thousand dollars in taxable value, shall be allowed on each eligible homestead.”
The division “applies retroactively to assessment years beginning on or after January 1, 2026.” Timing matters, because Iowa taxes run a year behind the assessment. The Department of Revenue’s form spells it out: “a claim filed by July 1, 2026 will apply to the taxable value for assessment year 2026 and taxes due and payable in September of 2027 and March 2028.” Taxes payable in September 2026 and March 2027 belong to assessment year 2025, which still gets the old credit.
From assessment year 2027 the $20,000 ceiling moves with inflation. The statute says “the maximum exemption amount under paragraph ‘a’ shall be multiplied by the cumulative adjustment factor,” built from the income-tax inflation factor in § 422.4, and the Department of Revenue determines that factor each year. The indexing clause names only the maximum.
| Piece | Rule | Where it lives |
|---|---|---|
| Homestead exemption | 10% of taxable value; minimum $5,500, maximum $20,000 (assessment year 2026) | § 425.1A(1A), added by SF 2472 § 134 |
| Age 65 exemption | Up to $6,500 of taxable value, applied after the 10% exemption, if the owner is 65 by January 1 of the assessment year | § 425.1A(1)(b) |
| Old homestead credit | Levy on the first $4,850 of actual value, minimum $62.50; assessment years before 2026 only | § 425.1(2)(c)(1) as rewritten; floor in § 425.1(5) |
For what these deductions mean against your own levy rate, use the property tax calculator; Iowa’s rollback and levy system is covered in property tax in Iowa.
Form 54-028 and the July 1 cutoff
The current form is “Homestead Tax Exemption,” 54-028 (05/22/2026). You file it with the assessor, not with the Department of Revenue. Section 425.2(1), as amended: “The claim shall be filed not later than July 1 of the year for which the person is claiming the credit or exemption. A claim filed after July 1 of the year for which the person is claiming the credit or exemption shall be considered as a claim filed for the following year.” That is the late-filing rule in the statute: a late claim rolls forward one year.
On the form you certify that you will occupy the dwelling “in good faith, on July 1 and for at least six months during that calendar year.” The form also accepts an owner “confined in a nursing home, extended-care facility, or hospital” whose homestead “is maintained and not leased or rented,” or an owner “on active duty in the military.” You also declare Iowa residency for income tax and that no other homestead claim has been filed on other property. Evidence of ownership has to be recorded with the county recorder or on file with the clerk of the district court when you file (§ 425.11(1)(e)(2)).
Renewal and the notices you owe
An allowed claim continues “for successive years without further filing” while you or your spouse own and use the home as a homestead on July 1 of each year, declare Iowa residency for income tax, and occupy it at least six months of the calendar year. A buyer must refile. The exception is a spouse who keeps the house in a chapter 598 dissolution distribution. If you stop using the home as a homestead, written notice to the assessor is due “by July 1 following the date on which the use is changed.” A seller, or the personal representative of an owner who dies, must also give the assessor written notice “that the property is no longer the homestead of the former claimant.” If the exemption is later disallowed and that notice was never given, § 425.7 adds “a civil penalty equal to five percent of the amount of the disallowed exemption or credit.” A fraudulent claim is disallowed in full, and a credit already paid comes back with a 25% penalty plus interest. The department can set aside an improper allowance “at any time within thirty-six months from July 1 of the year in which the claim is allowed.”
Owners already receiving the credit do not refile. SF 2472 § 147 says they “shall receive the exemption under section 425.1A, subsection 1A … without filing for such exemption.” The separate disabled-veteran credit for the entire tax continues, on its own form, under § 425.1(2)(b) as rewritten.
Chapter 561: the creditor homestead, measured in acres
A separate chapter protects the home from creditors, and it works differently. Section 561.16: “The homestead of every person is exempt from judicial sale where there is no special declaration of statute to the contrary.” People who live together as one household unit get one homestead between them. Section 561.2 limits the homestead by area: inside a city plat it “must not exceed one-half acre in extent, otherwise it must not contain in the aggregate more than forty acres,” and a homestead worth less than $500 may be enlarged to reach that amount. It covers one dwelling house plus appurtenant buildings. A shop used in the owner’s ordinary business counts as appurtenant if it is worth no more than $300 (§ 561.3).
Section 561.21 lists the debts for which the homestead can still be sold:
- debts “contracted prior to its acquisition, but then only to satisfy a deficiency remaining after exhausting the other property of the debtor, liable to execution”;
- debts “created by written contract by persons having the power to convey, expressly stipulating that it shall be liable, but then only for a deficiency remaining after exhausting all other property pledged by the same contract for the payment of the debt”;
- (a) debts “secured by a mechanic’s lien under chapter 572, including reasonable attorney fees as provided under section 572.32, subsection 1,” and (b) debts “incurred for work done or material furnished, including principal and interest on any note securing the purchase of such material, exclusively for the improvement of the homestead”;
- “If there is no survivor or issue, for the payment of any debts to which it might at that time be subjected if it had never been held as a homestead.”
Because § 561.16 applies only “where there is no special declaration of statute to the contrary,” another statute can reach the home too. The Code’s note under § 561.21 points to two: § 627.9 (“Homestead acquired with pension funds”) and § 252.14 (“Liability for assistance furnished poor person”).
Iowa homeowners ask
We closed in August 2026. Do we get the 10% exemption on our first bill?
Not on your own claim. A claim filed after July 1, 2026 counts as a claim for assessment year 2027, and that year’s exemption reduces taxes payable in September 2028 and March 2029. Assessment year 2026 turns on the seller’s claim: under § 425.2(2) an allowed claim stays on the homestead for each year the claimant owned and used it as a homestead on July 1.
I had the old credit. Do I need to fill out the new form?
No. SF 2472 moves existing claimants to the 10% exemption without refiling, as long as you still qualify.
My mother moved into a nursing home. Does her house lose the exemption?
Not by that move alone. Section 425.11(1)(d)(1)(b) treats an owner “confined in a nursing home, extended-care facility, or hospital” as still living on the homestead if the owner “maintains such homestead and does not lease, rent, or otherwise receive profits from other persons for the use thereof.” Renting it out ends that.
If I sell and buy another Iowa house, does creditor protection carry over?
Yes, up to the old value. Under § 561.20, a new homestead bought “with the proceeds of the old” is exempt from execution “to the extent in value of the old” wherever the old one would have been. The tax exemption does not carry over: the new home needs its own Form 54-028.
Related: Iowa real estate overview, Iowa closing costs in 2026, homeowner insurance in Iowa, compare state taxes, homestead exemptions by state.