Ankeny Is Considering a Local Option Sales Tax — Could It Lower Property Taxes?
If you live in or are thinking about buying a home in Ankeny, there’s a big development underway that could impact the future cost of owning a home: the City is considering adopting a local option sales tax (LOST), and one of the key proposed benefits is using those sales tax revenues to help reduce property taxes. (KCCI)
Here’s what that means, how it might work, and what it could mean for homeowners and future buyers.
What Is a Local Option Sales Tax?
In Iowa, cities can choose to adopt an additional 1% local option sales tax on top of the state’s base sales tax. This tax is collected on most taxable retail sales within the city limits. (Department of Revenue)
Not all cities have adopted this tax — and until recently, Ankeny was the only large city in Polk County without a local option sales tax. (KCCI)
What’s Happening in Ankeny?
In late 2025, the Ankeny City Council approved putting a local option sales tax proposal on the ballot. If voters approve it (likely in 2026 or 2027), Ankeny would implement a 1% sales tax within the city. (KCCI)
City leaders project the tax could generate about $12 million per year — money that could be used to fund city priorities and reduce the burden on property taxpayers. (KCCI)
How Would the Sales Tax Help Property Taxes?
Here’s the proposed approach:
Shared Revenue
If approved, an estimated half of the revenue from the sales tax could be used to reduce property taxes for residents. (KCCI)
This means instead of paying all local revenue through property tax levies, the city would receive part of its revenue from sales to both residents and visitors — arguably spreading the burden more broadly.
Infrastructure and Services
The plan also calls for using part of the sales tax revenue to:
Build or maintain roads
Support city infrastructure projects
This can free up property tax dollars for other priorities or help limit property tax rate increases tied to city service funding. (KCCI)
Why This Matters for Homeowners
Potential Lower Property Tax Burden
If part of the city’s revenue needs can be met through sales taxes, Ankeny may be able to:
Reduce the overall property tax rate
Slow growth in property tax bills
Fund essential services with less reliance on property taxes
This could be a meaningful tax affordability benefit over time for homeowners and buyers.
Visitors Share the Cost
One argument city leaders make is that visitors to Ankeny would help contribute to the tax base when they shop or dine here — a burden currently borne mostly by residents through property taxes. (KCCI)
Things to Consider as a Voter or Buyer
Voter Approval is Required
Any local option sales tax must be approved by Ankeny voters before it can take effect. It’s not automatic just because the City Council put it on the ballot. (KCCI)
Impact on Residents
Some residents express concerns about the regressive nature of sales taxes (meaning they take a larger percentage of income from lower‑income households). That’s often part of the public discussion around LOST proposals. (KCCI)
Timeline
If approved at the ballot, the tax could go into effect as soon as 2027 — so this is not a distant possibility but a near‑future change to be aware of. (KCCI)
What This Means for Homebuyers
Whether you’re a first‑time buyer or moving within the metro, it’s worth keeping an eye on this issue because:
Lower property taxes can improve affordability
Higher sales tax revenue could influence city budgeting decisions
Future tax bills may look different than what current homeowners pay
Final Thoughts
Ankeny residents may soon decide whether to adopt a local option sales tax — and part of the motivation is to help reduce reliance on property tax revenue.
This kind of local tax shift is a strategic effort to balance revenue sources, spread the tax burden more broadly, and potentially ease the property tax load for homeowners — but it will ultimately be up to voters to decide.
If you’re thinking about buying in Ankeny or are budgeting for future tax costs, this is a development worth watching. (KCCI)