This bill amends Section 425.15 of the Iowa Code to expand eligibility for the disabled veteran homestead tax credit by introducing new categories of veterans based on their permanent service-connected disability ratings. Specifically, it establishes a new subsection that allows veterans with disability ratings of less than 100% but equal to or greater than 70%, 40%, and 10% to qualify for a homestead credit over a phased timeline starting from the fiscal year beginning July 1, 2027, through fiscal years beginning on or after July 1, 2029. The credit amount will be the greater of the standard homestead credit or a percentage of the tax levied on the homestead that corresponds to the owner's disability rating percentage.

Additionally, the bill modifies existing provisions to ensure that the credit can be continued to the estate of a deceased owner or to a surviving spouse and child, as long as the spouse remains unmarried. It also clarifies that beneficiaries who elect to secure the credit under the new conditions are not eligible for other real property tax exemptions for veterans. The bill takes effect immediately upon enactment and applies retroactively to homestead credit claims filed on or after January 1, 2026, for credits due in the specified fiscal years.

Statutes affected:
Introduced: 425.15, 425.1, 234.1