New Homestead Tax Exemption for Claimants 65 Years of Age or Older
In addition to the homestead tax credit, eligible claimants who are 65 years of age or older on or before January 1 of the assessment year are now eligible for a homestead tax exemption. For the assessment year beginning on January 1, 2023, the exemption is for $3,250 of taxable value. For assessment years beginning on or after January 1, 2024, the exemption is for $6,500 of taxable value. Claimants will be able to file a claim for this exemption on the same form as the claim for credit. When a homestead credit claim is approved, the exemption will also be granted if the claimant meets the age criteria for that assessment year. If the claim for the exemption is successful, the exemption will be applied in successive years without needing to file again. Unlike the homestead tax credit, the state will not be reimbursing the exemption to counties.
Claimants who have previously been approved and continue to qualify for the homestead credit before May 4, 2023 could be automatically awarded the exemption if they meet the eligibility criteria. The exemption can only be automatically granted if the assessor has enough information to verify eligibility. The Iowa Department of Revenue (IDR) has amended the Homestead Form to allow claimants to apply for the new exemption. IDR will advise claimants to apply for the exemption using the new form if they are eligible.
Increase in Military Exemption
The military service tax exemption is being increased to $4,000 in taxable value for assessment years on or after January 1, 2023, for a honorably separated, retired, furloughed to a reserve, placed on inactive status, or discharged veteran as defined in Iowa Code section 35.1(2)(a) or (b). For each fiscal year beginning on or after July 1, 2024, funding for the military service tax exemption will be removed from the general fund of the state.
