Iowa tax reform and constitutional amendment

Iowa is undergoing significant tax policy changes involving both legislative action and potential constitutional amendments. Senate File 2472, signed in May 2026, is scheduled to take effect on January 1, 2027. This law aims to limit the annual growth of property tax revenue from certain levies to 2 percent and replaces the homestead tax credit with a homestead tax exemption, covering 10 percent of a home’s taxable value.

In addition to property tax reforms, voters will decide on Amendment 1 this November. This constitutional amendment would require a two-thirds supermajority vote in both the Iowa House and Senate before any individual or corporate income tax rates can be increased or new income-based taxes implemented.

Proponents of the amendment argue it serves as a safeguard for taxpayers and encourages spending restraint following Iowa’s transition to a flat income tax rate. Conversely, critics, including the League of Women Voters of Iowa, express concern that such a requirement could permanently limit the ability of future officials to address unforeseen economic emergencies.