Sep 11, 2026 - News

Iowa cuts historic tax credit access for homeowners

Jason Clayworth

Row of two-story houses with wraparound porches and white railings on a quiet residential street. Gray and blue siding, brick foundations, leafless trees, and a street lamp nearby. — These three homes, moved from Drake to vacant lots along the 800 block of 19th Street in Sherman Hill about six years ago, were restored with state historic tax credits. Their combined assessed value rose from $95,500 to just over $2 million. Photo: Courtesy of the Polk County Assessor

Iowa has largely excluded single-family homes from a historic preservation tax credit program that helped homeowners shoulder the cost of restoring some of the state's oldest houses.

Why it matters: Preservationists warn that the change removes a financial incentive to save historic homes, which can be far more expensive to restore than to tear down.

Driving the news: A provision of a bill signed by Gov. Kim Reynolds last year made most single-family homes ineligible for Iowa's Historic Preservation Tax Credit.

The Iowa Economic Development Authority (IEDA) put implementing rules into effect about two months ago.

Zoom in: For homeowners, the program offered credits worth up to 25% of qualified rehabilitation costs, potentially saving tens of thousands of dollars on a restoration.

Project applications submitted before July 1, 2025, were grandfathered, but new single-family applications have been barred since that date.

By the numbers: Demand already exceeds the program's $45 million annual cap.

IEDA received $80 million in requests in FY2024 and $64.7 million in FY2025.

State of play: The credit has long been used in DSM's historic Sherman Hill and River Bend neighborhoods.

River Bend resident Jon Royal, who lived in a home built by his great-grandparents, told lawmakers in 2018 that the neighborhood's restorations would not have been possible without the credits.

The big picture: Among Iowa's neighboring states, Missouri and Wisconsin offer historic rehabilitation income-tax credits to homeowners, while South Dakota offers an eight-year tax assessment moratorium for historic homes.

Minnesota, Nebraska and Illinois exclude owner-occupied homes from their state income-tax credit programs.

What they're saying: Steve Wilke-Shapiro, co-president of Preservation Iowa, tells Axios he doesn't expect the change to reverse the revival of areas such as Sherman Hill, but it will "reduce potential" for future restoration.

He predicts fewer rehabilitations and, over time, more historic houses lost to demolition.

The other side: IEDA director Debi Durham argued in 2020 for ending credits for owner-occupied homes, saying only a few owner-occupied projects had recently received about $1 million in total.

She said taxpayers shouldn't be paying people who can afford their own remodeling work.

What we're watching: Whether Preservation Iowa and other advocates can persuade lawmakers to restore the credit for single-family homes.

Wilke-Shapiro says it's among Preservation Iowa's legislative priorities.

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Iowa cuts historic tax credit access for homeowners

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