Senior homeowners urged to apply for new property tax exemption before July 1

The new Iowa age 65 or older home property tax exemption application form is available here.

By Bob Steenson, bsteenson@charlescitypress.com

Senior homeowners have until July 1 to take advantage of the first year of Iowa’s new home property tax exemption that went into effect this year. Veterans are also getting an increase in their military service property tax exemption.

Floyd County Assessor Brandi Schmidt reminds any Floyd County homeowners who were age 65 or older on Jan. 1 this year to apply for the new homestead exemption.

The Iowa Legislature passed the property tax relief law this year and Gov. Kim Reynolds signed it on May 4. The Iowa Department of Revenue announced recently that the amended application form for the homestead tax credit and the new exemption is now available.

Most homeowners have likely already applied for the state homestead tax credit, which knocks the first $4,850 off the taxable value of a home.

But they must apply again to be eligible for the new exemption, which will reduce their taxable value by an additional $3,250 this first year for taxes that are payable in fall 2024 and spring 2025, and by double that – $6,500 – for tax years after that.

Once applied for, the new homestead exemption will continue as long as the homeowner qualifies.

Schmidt said the form is available at the Assessor’s Office at the Floyd County Courthouse, online at the assessor’s website, floyd.iowaassessors.com, or the form can be mailed to homeowners by calling the Assessor’s Office at 641-257-6152.

It must be returned to the County Assessor’s Office or postmarked by July 1 to qualify for the first year’s exemption. If the application is made after July 1 it will be considered a claim for the following year.

To fill out the form the owner has to give his or her birth date and sign the form, attesting to its accuracy under penalty of perjury.

Schmidt said that in cases of joint ownership, only one of the owners needs to be age 65 or older for the home to qualify for the new exemption.

Homeowners must live in the home at least six months of the year, or be confined in a nursing home, extended care facility or hospital, or on active duty in the military, and the home must not be leased or rented out.

The exemption is not a direct reduction in taxes, but a reduction in the value of the property that is subject to tax.

For example, if the combined levy rate from all taxes (city, county, school, etc.) is $38 per $1,000 of taxable valuation (about the average in Charles City over the past two years), then the $3,250 reduction in taxable value will result in a savings of $124 in the amount of property taxes owed. The full $6,500 exemption in future years will reduce the property tax by $248. Those savings are the same regardless of the value of the property, based on that levy rate.

Veterans will also see an increase in their military service property tax exemption, but that increase will take effect automatically for any veteran who is already registered to receive the existing veterans tax break, Schmidt said.

The military service property tax exemption and credit will increase from the current $1,852 to $4,000, starting with the assessment year beginning on Jan. 1, 2023.

Veteran homeowners must be “honorably separated, retired, furloughed to a reserve, placed on inactive status or discharged” to be eligible, according to the Iowa Department of Revenue.