($K_{0.5}Na_{0.5}$)($Nb_{0.96}Sb_{0.04}$)$O_3$+1.2 mol% $K_4CuNb_8O_{23}$ ceramics doped with iron oxide ($Fe_2O_3$) were prepared by a conventional mixed oxide method. And then, their piezoelectric and dielectric properties were investigated as a function of $Fe_2O_3$ addition. X-ray diffraction studies reveal that $Fe^{3+}$ diffuses into the NKN lattices to form a solid solution with a pure perovskite structure at room temperature. At the sintering temperature of $1,060^{circ}C$, when 0.2 mol% $Fe_2O_3$ was doped, the piezoelectric constant ($d_{33}$), electromechanical coupling factor (Kp), and mechanical quality factor ($Q_m$) showed the excellent values of 131.67 pC/N, 0.436, and 696.36, respectively. Results show that $Fe_2O_3$ deped ($K_{0.5}Na_{0.5}$)($Nb_{0.96}Sb_{0.04}$)$O_3$+1.2 mol% $K_4CuNb_8O_{23}$ lead-free piezoelectric ceramics are a promising lead free material for piezoelectric transformer applications.