Fiscal Note
Fiscal Services Division
HF 2188 – Real Estate Transfer Tax, Housing Trust Fund (LSB5440HV)
Staff Contact: Evan Johnson (515.281.6301) evan.johnson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2188 removes the $7.0 million cap on annual deposits from the Real Estate Transfer
Tax to the Housing Trust Fund.
Background
The Real Estate Transfer Tax is imposed on the transfer of real estate in the State and is based
on the assessed value of home sales. The tax is equal to $0.80 per $500 (or any fractional part
of $500) of consideration paid as part of or a condition of the property transfer, with the first
$500 being exempt. The tax is paid to the county. The county retains 17.25% of the tax
revenue for deposit into the county general fund. The county remits the remaining 82.75% to
the State. Under current law, the State portion of the tax is deposited as follows:
• 30.0% to the Housing Trust Fund, up to a limit of $7.0 million.
• 5.0% to the Shelter Assistance Fund.
• 65.0%, plus any Housing Trust Fund revenue in excess of the $7.0 million cap, to the State
General Fund.
Moneys in the Housing Trust Fund are annually appropriated to the Iowa Finance Authority to
be used for the development and preservation of affordable housing for low-income persons in
the State and for the Iowa Mortgage Help Initiative. Figure 1 shows the historical distribution of
the State’s share of the Real Estate Transfer Tax.
Figure 1 — Historical Distribution of Real Estate Transfer Tax Revenue
(in Millions)
FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023
Housing Trust Fund $ 3.0 $ 3.0 $ 3.0 $ 3.0 $ 7.0 $ 7.0
Shelter Assistance Fund 1.2 1.2 1.2 1.6 2.0 1.6
State General Fund 19.2 19.1 20.3 27.4 36.9 23.4
Total $ 23.4 $ 23.3 $ 24.5 $ 32.0 $ 45.9 $ 32.0
Assumptions
• The supply and demand of housing will remain constant.
• Future Real Estate Transfer Tax receipts will increase by 2.0% each year.
Fiscal Impact
House File 2188 eliminates the cap on the Housing Trust Fund so that 30.0% of the Real Estate
Transfer Tax receipts would be deposited into the Housing Trust Fund, regardless of the
amount. This is estimated to increase funding to the Housing Trust Fund and decrease funding
to the General Fund by the amounts in Figure 2.
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 Figure 2 — Fiscal Impact of HF 2188
(in Millions)
General Fund Housing Trust Fund
FY 2025 $ -2.2 $ 2.2
FY 2026 -2.4 2.4
FY 2027 -2.6 2.6
FY 2028 -2.8 2.8
FY 2029 -2.9 2.9
Source
Department of Revenue
/s/ Jennifer Acton
February 1, 2024
Doc ID 1445290
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
www.legis.iowa.gov
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