Understanding Residential Property Tax Abatement Programs in Central Iowa
Residential property tax abatement programs have been a popular way for communities to encourage growth and development. These programs incentivize home buyers to purchase new construction homes by reducing the property tax burden for a set period. This, in turn, encourages builders to construct "spec" homes that they can market as tax-abated, boosting the local housing supply and supporting community growth.
Example of a Local Tax Abatement Program
One notable example of a tax abatement program was in Norwalk, Iowa, where the city offered to reduce the taxable value of new homes by up to 30% of the assessed value (up to a $75,000 maximum). For instance, if a new home was assessed at $200,000 (excluding the land value), the taxable value would be reduced by $60,000 for five years. After this period, the home would be fully taxed at the assessed value.
This tax abatement program has been in place for nearly 20 years, and 2024 will be its final year. As a real estate agent in Norwalk since before this program began, I’ve seen firsthand how it has positively impacted residential growth in our community. Many buyers found the temporary property tax relief to be a helpful incentive, which spurred new home construction, strengthened the local housing market, and paved the way for more commercial developments.
Why Norwalk's Tax Abatement Program is Ending
Residential growth in Norwalk is now occurring organically, reducing the need for this kind of incentive. Additionally, changes made by the Iowa State Legislature have impacted the effectiveness of tax abatement programs. As Norwalk shifts its focus toward commercial development, the city continues to offer incentives specifically for commercial projects, which will, in turn, benefit all residents since commercial properties generate more tax revenue than residential properties.
Final Opportunity for Residential Tax Abatement in Norwalk
If you’re interested in applying for a residential property tax abatement in Norwalk, the deadline for this final round of applications is the end of this year. Norwalk isn’t alone in ending its program; the City of Carlisle also ended its residential property tax abatement program in 2024. However, nearby Indianola still offers a residential tax abatement program, though only in designated developments.
For more information about these programs or about residential property tax incentives in other central Iowa communities, feel free to reach out to me.
Norwalk IA Real Estate –
Jon Niemeyer, Broker/Owner/REALTOR® at EXIT Realty North Star. I list and sell real estate in Central Iowa including Norwalk, Des Moines, West Des Moines, Cumming, Indianola, Carlisle, Waukee, Urbandale, Grimes, Clive, Johnston, Ankeny, Altoona, and Pleasant Hill in the Counties of Warren, Polk, Dallas, and Madison. Call
Jon Niemeyer at
515-490-4675.