On January 12, 2026, the Iowa Legislature will reconvene. Governor Kim Reynolds and legislative leaders have all stated that property tax reform will be a priority. Across the nation, policymakers have struggled to address property tax reform. Numerous states—including Iowa—have made substantial progress in reducing income tax rates, but property tax reform has proven more difficult. Too often, proposed reforms either fall short or produce unintended consequences. Iowa policymakers can avoid both outcomes by ensuring that any reform effort aligns with the five principles of sound tax policy.
The five principles of sound tax policy should guide the development of any reform measure:
1. Fair: Iowa’s tax code should be fair and should not favor one group of taxpayers at the expense of another.
2. Competitive: Iowa should focus on lowering high tax rates that harm economic competitiveness. The tax code should encourage, rather than hinder, economic growth.
3. Transparent: Iowa’s tax code is overly complex and should be simplified. Taxpayers deserve a system that is easy to understand and transparent—especially when it comes to tax credits and incentives.
4. Limited: Taxes should only be collected to fund the essential functions of state and local government; government does not have an unlimited claim to the income of individuals and businesses.
5. Protective of Freedom: Iowa’s tax code should promote freedom and avoid using taxes for social engineering.
Applying these principles to property tax reform is essential for creating lasting change.
Fair: Fairness is a commonly used term, and taxpayers want to be treated equally. Iowans are demanding property tax relief, and reform should ensure all taxpayers benefit—not just select groups. Relief should not be targeted at one class of property owners over another.
Competitive: Property taxes significantly affect Iowa’s economic competitiveness. Homeowners and businesses often experience “sticker shock” when they see their tax bills—and unfortunately, this shock recurs year after year. Local officials argue that economic growth requires incentives, abatements, and development packages. However, this approach violates fairness by benefiting some taxpayers over others, and high property taxes themselves discourage growth. Lowering the property tax burden is a stronger way to attract businesses, support Iowa families, encourage relocation, and expand housing opportunities.
Transparent: Iowa’s property tax system is overly complicated, which too often stands in the way of reform. Local governments frequently shift blame to other entities, especially county assessors, leading many taxpayers to misjudge the cause of rising bills. Past attempts to improve transparency have fallen short, and taxpayers often express frustration when their concerns are dismissed by local officials. Greater transparency and clarity are essential to building trust and accountability.
Limited: This may be the most important principle. Property taxes must be limited. Local governments should not assume an unlimited claim on the income of Iowans. High property taxes are a direct result of uncontrolled government spending, and any successful reform must address spending growth. This is why past property tax reforms have struggled to deliver relief—because they failed to limit spending.
Protective of Freedom: Property taxes are often the most disliked form of taxation because taxpayers receive a bill and must physically make a payment. As a result, many feel they never truly own their homes or property, but are instead renting them from government. If income taxes were paid the same way—rather than withheld throughout the year—the public response would be similar.
Most Iowans accept that reasonable taxation is necessary to provide essential services. The problem is that the property tax burden has grown unbalanced, undermining both economic and personal freedom. Economic freedom includes the right to keep the earnings you work for, and property rights are fundamental to liberty. A homeowner should not lose their property—or a small business be forced to close—because they cannot afford their taxes.
This principle also relates to fairness. Property tax relief should apply broadly to all taxpayers. One group is not more deserving than another. A family struggling to make ends meet is no different from a senior on a fixed income. Targeted relief simply shifts the burden onto someone else. Sound tax reform should expand economic freedom and opportunity—not redistribute burdens among taxpayers. Tomorrow, we will look at two policy solutions that adhere to the five principles of sound tax policy. Iowa lawmakers can in fact craft meaningful, lasting property tax relief that strengthens the state’s economy and protects taxpayers.
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