Washington legislative bills affecting property taxes this session

gmerkt · Apr 12, 2023

There are two of concern to those who pay the bills.

1. HB 1628, which has to do with capital gains taxes. It is aimed at business and people with deep pockets. BUT: It also affects the sale of real property. It involves what is called the Real Estate Excise Tax, or REET. Which is a tax that the seller pays when they sell a piece of real estate. Part of the tax goes to the state, part goes to the county in which the property is located. Some property is exempted, like agricultural if I'm not mistaken. But most people who owns a home will pay this when they sell, at least while they are still living. This session, the legislature bumped up the amount that the counties may charge, and I imagine they will all avail themselves of it. Up to $525K, the tax is nearly 2%. Over $525K, the amount is a bit over 2%. The justification for this increase is to provide more money for funding affordable housing. Okay class, what do you call it when the government takes money away from those who have it and give it to those who don't have it? It's called Communism.

2. Second is HB1355, which passed and is on the governor's desk. This one is an update of the property tax exemption for the disabled and senior citizens. Okay, as an elder, they've got my attention. This came about because legislators were getting a lot of feedback from constituents about inflation bumping them over the exemption thresholds and out of the program. This bill raises all the income thresholds for qualification. But even the least favorable level of reduction freezes the assessment valuation on your property and thus protects you from relentless Monopoly Money increases.

Bear in mind, this program has different methods of calculating income for exemption purposes, including potential reductions. It's not based strictly on what your federal tax return says. BUT: If you think you your income is low enough to qualify, I encourage you to look into this. Especially those of you who live in relatively "rich" counties, like King, Snohomish, Clark, Kitsap and Thurston.

gmerkt · Apr 24, 2023

The governor signed HB 1355, it's now law, takes effect 7-23-23. Meaning, in place for next tax year, 2024.

gmerkt · Apr 6, 2026

Update. Another three years have rolled around. I just read where the update for tax years 2027-29 was adopted and signed. Which revises income thresholds upwards. In my county, one of the high cost of living ones, the highest category (but where the greatest percentage of discount results) was bumped from $84K to $92K. Yes, I know all you well-heeled hot rods wonder how we poor people can live on that kind of money. BUT: If you are one of those poor unfortunates as I am, this is welcome news.

Also a change for this year is simplification of the application process. The expense deductions that the counties are allowed against income have a standard deduction option of $7,500. So if you make say, $98K, subtract the $7,500 deduction, which adjusts your income down to $90,500, still under the bar, so you qualify. Of course, if you have qualified deductions over $7,500 that you can document, you can use that higher number. Just be aware that the deductions allowed under this program are different from federal tax rules. Completely different ball game.

Remember, one of the benefits of this program is that once your application is approved and stays approved (meaning, your income doesn't go back up and disqualify you), your assessed valuation is frozen. Which is another way your future taxes are reduced.

Fortunately, the only consideration for this program is income, not wealth or assets.

To keep people honest, your status is subject to audit at any time. Also, they require a review every so often, which means reapplication. Which is then good for another X number of years. But your previously frozen assessed valuation is kept intact so long as you are reapproved.

This only applies for owner-occupied properties.

This program is managed by the counties, go to their assessor's website for details and the application form. The new 2027-29 information may not be available yet, but it should be shortly.