What Is a Property Tax Abatement in Des Moines and How Can It Save You Thousands?

If you’re shopping for a home in Des Moines, especially in neighborhoods like Columbus Park, Highland Park, or other revitalizing areas, you may have come across the phrase property tax abatement and wondered what it actually means.

I get this question all the time. And honestly, it’s one of the most powerful tools buyers can use to lower their monthly payment and build wealth faster. A property tax abatement is a city incentive that temporarily reduces how much you pay in property taxes. The goal is to encourage new construction, renovations, and neighborhood investment.

And yes, the savings can be significant.

How Does a Property Tax Abatement Work in Des Moines?

In Des Moines, residential property tax abatements are commonly offered on qualifying new construction and major renovation projects. These abatements typically last between 5 and 10 years, depending on the specific program.

Instead of paying full taxes on both the land and the home, you may only be taxed on the land value for several years. The “improved value” of the home is temporarily excluded from taxation.

This can reduce your property tax bill by hundreds of dollars per month during the early years of homeownership.

Example: How a 9-Year Property Tax Abatement Saves You Money

Many new construction homes in Des Moines neighborhoods like Columbus Park and Highland Park qualify for a 9-year declining tax abatement. Here’s how that typically works:

Years 1–6

The improved value of the home is 100% abated. You only pay taxes on the land.

Year 7

75% of the improved value is still abated.

Year 8

50% of the improved value is abated.

Year 9

25% of the improved value is abated.

Year 10

Full property taxes begin.

This structure gives homeowners the biggest savings when they need it most, at the beginning.

How a Tax Abatement Impacts Your Monthly Payment

Property taxes are a major part of your monthly mortgage payment. A tax abatement can drastically reduce this cost.

In some cases, buyers in Des Moines pay as little as $10 per month in property taxes during the fully abated years.

That difference can mean:

• Lower monthly payment

• Easier loan approval

• More financial breathing room

• Ability to save or invest

• Less stress

Over the full term of an abatement, these savings can add up to tens of thousands of dollars.

Why Property Tax Abatements Are Especially Helpful for First-Time Buyers

Buying your first home comes with a lot of new expenses: furniture, lawn equipment, appliances, and unexpected repairs.

A tax abatement gives you time to settle in without being hit with full taxes right away. It helps you:

• Build an emergency fund

• Pay down other debt

• Make smart home upgrades

• Create long-term stability

Instead of stretching your budget thin, you get a softer landing.

How Tax Abatements Help Build Long-Term Wealth

A common misconception is that tax abatements are only short-term perks. In reality, they can play a major role in long-term wealth building.

Lower monthly expenses early on allow you to:

• Make extra principal payments

• Invest elsewhere

• Fund home improvements

• Increase resale value

You’re not just saving money, you’re creating opportunities.

Combining Tax Abatements with Other Buyer Incentives

Some homes in Des Moines also qualify for additional programs that can be stacked on top of tax abatements.

For example, certain properties qualify for forgivable loans through Neighborhood Finance Corporation (NFC).

These programs may offer:

• Up to $10,000

• 0% interest

• Fully forgiven after a set number of years

This money can be used for things like finishing a basement, adding a fence, or making upgrades that immediately increase your home’s value.

That means lower taxes, lower payments, and instant equity.

Why Des Moines Offers Property Tax Abatements

Cities like Des Moines use tax abatements to encourage:

• New housing development

• Neighborhood revitalization

• Homeownership accessibility

• Community growth

This is why you’ll often see abatements in areas like Columbus Park, Highland Park, Union Park, and other growing neighborhoods.

It’s a win-win: buyers save money, and communities thrive.

Not Every Home Qualifies for a Tax Abatement

It’s important to know that not all homes qualify. Abatements usually apply to:

• New construction

• Major renovations

• City-approved development zones

This is why working with a knowledgeable local agent matters. I walk my clients through the actual numbers so they can see the real savings, not just marketing language.

A property tax abatement can be the difference between feeling stretched and feeling financially secure in your home.

It can mean:

• Lower monthly payments

• More flexibility

• Faster equity growth

• Smarter long-term decisions

If you’re buying in Des Moines, especially in neighborhoods like Columbus Park or Highland Park, this is something you absolutely want to understand before making an offer.

If you’d like help breaking down the numbers for a specific home, I’m always happy to walk you through it.

Real estate should feel empowering, not confusing.

New construction property from NFC (neighborhood finance corporation) and Invest DSM