Iowaflat 3.8% income tax, 10th highest property tax, median home $215K

Worth knowing before you move to Iowa

Iowa cut its income tax to a flat 3.8% in 2025 and stopped taxing retirement income for residents 55 and over in 2023, including pensions, 401(k) and IRA withdrawals. It still has an inheritance tax, but that is being phased out and ends for deaths after 2024. Winters are long and the state's economy still moves with corn, soybean and hog prices.

What Iowa taxes, and what it doesn't

Iowa levies a flat 3.8% income tax. A household earning $75,000 pays an effective 3.8%, about $2,850 a year; at $150,000 the effective rate is 3.8%. Among the 41 states that tax income, Iowa has the 11th lowest effective rate at $100,000 of income.

Property tax runs 1.42% of home value a year, roughly $3,053 on the state's median home of $215K. The national effective rate is about 1.10%, and Iowa has the 10th highest rate of the 50 states.

Combined state and local sales tax averages 6.94%, the 22nd lowest in the country (the state portion is 6%).

For retirees: Social Security benefits are not taxed, pension income is fully exempt, and there is no estate or inheritance tax.

Capital gains are taxed as ordinary income.

Housing and the cost of living in Iowa

Iowa's cost of living index is 88, where 100 is the national average; that is the 10th cheapest of the 50 states.

The median home costs $215K, 29% below the national figure and the 4th lowest among the states. A two-bedroom rents for about $1,050 a month.

Carrying costs matter as much as the price: home insurance averages $1,700 a year, flood coverage adds about $700 where it is needed, car insurance runs $1,150.

Budget $135 a month for electricity and gas, $440 a month in groceries for two, $1,100 a month for full-time infant care.

Safety, health and schools

Violent crime is 284 incidents per 100,000 residents in the FBI's 2023 Crime Data Explorer figures, below the median state (387); Iowa is the 15th safest of the 50 by that measure. Property crime is 1,626 per 100,000.

Life expectancy is 78 years (County Health Rankings 2024). 5.8% of residents have no health insurance, and the state has expanded Medicaid. The Commonwealth Fund's 2023 scorecard ranks Iowa's health system 21st of 50.

Education Week's 2023 Quality Counts report ranks K-12 schools 15th in the country, and the state runs a school-choice voucher program.

Politics, guns and social policy

Politically, Iowa is a solidly Republican state that went to Trump by 13 points in 2024.

On guns, no permit is required to carry a concealed handgun, and Giffords grades the state's gun laws F.

Abortion is banned with narrow exceptions. Marijuana is medical only. Iowa is a right-to-work state, and the minimum wage is $7.25 an hour.

Climate, risk and getting around

Natural disaster risk is high. The main hazards are tornado, flood, blizzard. Annual average air quality index is 34 (under 50 is good).

Iowa has no top-25 hub airport, with about 40 nonstop destinations from its busiest airport.