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Local Property Tax Abatement & Exemption

Category: Iowa State Incentives, Tax Incentives

Iowa law allows cities and counties to abate local property taxes for improving industrial real estate. The most common amount of actual value added at a new or expanded facility, which is eligible to exempt from taxation, is as follows:

Year One: 75% — Year Two: 60% — Year Three: 45% — Year Four: 30% — Year Five: 15%

Other types and terms of local property tax incentives are available. City councils or county boards of supervisors may use the property taxes resulting from the increase in taxable valuation caused by the construction of new industrial or commercial facilities to provide economic development incentives to a business or industry. Tax Increment Financing may be used to offset the cost of public improvements and utilities that will serve the new private development, to finance direct grants or loans to a company, or to provide the local match for federal or state economic development assistance programs.