Property Tax Exemption for Senior Citizens and Disabled Persons

WASHINGTON STATE DEPARTMENT OF REVENUE

JANUARY 2016

Property Tax Exemption for

Senior Citizens and Disabled Persons

If you are a senior citizen or disabled

with your primary residence in

Washington State, there are two

programs that may help you pay your

property taxes and/or special

assessments. Your household income

and your age or disability determine

your eligibility for both programs.

This publication provides an overview

of the property tax exemption program

that helps senior citizens and disabled

persons reduce their payment of

property taxes.

For information about the property tax

deferral program, see the Property Tax

Deferral for Senior Citizens and

Disabled Persons fact sheet.

Program Overview

Under the exemption program,

the value of your Washington State

residence is frozen for property tax

purposes, and you become exempt

from all excess and special levies and

possibly regular levies – resulting in a

reduction in your property taxes. The

exemption is available for your primary

residence and up to ve acres* of land.

A mobile home may qualify, even if the

land where the mobile home is located

is leased or rented.

* The exemption is available for a primary

residence and one acre of land. If local zoning

and land use regulations require more than one

acre of land per residence in the area where

you live, you may be eligible for a property tax

exemption on up to ve acres of land.

Eligibility Requirements

To be eligible for this program you

must meet the age or disability,

ownership, residency, and income

requirements Your application must

include proof of your age or disability.

Age and Disability

On December 31 of the year before the

tax is due, you must meet one of the

following criteria.

 At least 61 years of age

 Unable to to work because of a

disability OR a veteran entitled to

and receiving compensation from

the United States Department of

Veterans Aairs at a total disability

rating for a service-connected

disability.

Example: Your 61st birthday is in

November 2015. You may le a 2015

application requesting an exemption

on your 2016 taxes.

Ownership

You must own your home in

Washington State by December 31 the

year before the taxes to be exempted

are due. For example, to receive an

exemption in 2016, you must own your

home by December 31, 2015.

The type of ownership must be in total

(fee owner), as a life estate (including a

lease for life), or by contract purchase.

A home owned jointly by a married

couple, a registered domestic

partnership, or by co-tenants is

considered owned by each spouse,

domestic partner, or co-tenant. Only

one person must meet the age or

disability requirement. If you share

ownership in a cooperative housing

unit and your share represents the

specic unit or portion where you live,

you will be eligible for the exemption

of your unit.

If your primary residence or the land

under your primary residence is owned

by a government entity and you meet

the program requirements, you may be

eligible for a leasehold excise tax credit.

Residency

The property must be your primary

residence by December 31 the year

before the tax is due. For example,

you must be living in your home by

December 31, 2015, to receive an

exemption on your 2016 property tax.

To keep your exemption going

forward, you must live in your home

for more than six months each year.

Your residence may qualify even

if you are in a hospital, nursing home,

boarding home or adult family home.

You may rent your residence to

WASHINGTON STATE DEPARTMENT OF REVENUE

someone else during your stay in one

of these facilities if the rental income is

used to pay the facility costs.

Property used as a vacation home

is not eligible for the exemption

program.

Household Income

Your annual household disposable

income may not exceed $40,000. If your

household income is between $40,000

and $45,000, you may qualify for the

deferral program. See the Property Tax

Deferral for Senior Citizens and

Disabled Persons fact sheet for more

information.

Household income includes the

combined disposable income of you,

your spouse or domestic partner, and

any co-tenants. A co-tenant is a person

who lives in your home and has an

ownership interest in your home.

Household income does not include

income of a person who:

 Does not have ownership interest

and lives in your home, except for

a spouse or domestic partner.

However, you must include any

income that person contributes

to the household.

 Has ownership interest in your home

but does not live in the home. If

someone living elsewhere has any

ownership interest, the amount of

your exemption will be based on the

percentage of your ownership

interest in the property.

Property Tax and Levies

Eligible for Exemption

The value of your residence is “frozen” as

of January 1, 1995, or January 1 of the

initial application year, whichever is later.

Example: If you meet the qualications

in the 2014 application year, the taxable

assessed value for your residence will

remain “frozen” at the 2014 level, unless

there is a change in your status or new

construction.

The assessor will continue to establish

the property market value, but you will

only be billed for taxes on the lower of

the market value or the frozen value.

If your annual income for the

application year is $40,000 or less, your

home will be exempt from all excess

and special levies. Excess and special

levies are in addition to regular levies.

They require voter approval and

provide money for a specic purpose,

for example, school bonds and

maintenance and operation levies.

In addition, if your income is $35,000

or less, a portion of the regular levy

amount may be exempt.

 If your household income is between

$30,001 and $35,000, you are exempt

from regular levies on $50,000 or 35

percent of the assessed value,

whichever is greater (but not more

than $70,000 of the assessed value).

For example:

Household income $31,000

Assessed home value $150,000

Taxable property value $97,500

(35 percent of $150,000 = $52,500)

($150,000 - $52,500 = $97,500)

 If your household income is $30,000

or less, you are exempt from regular

levies on the rst $60,000 or 60

percent of your home’s assessed

value, whichever is greater. For

example:

Household income $12,000

Assessed home value $150,000

Taxable property value $60,000

(60 percent of $150,000 = $90,000)

($150,000 - $90,000 = $60,000))

Computing Disposable Income

The maximum amount of annual

income you may receive and qualify

for the exemption is $40,000. The

disposable income you receive during

the application year determines your

eligibility.

Example: You are ling a 2015

application requesting an exemption

on your 2016 taxes. You must use your

2015 income to qualify.

Disposable income includes income

from all sources, regardless of whether

the income is taxable for federal income

tax purposes. Some of the most

common sources of income include:

 Social Security and Railroad

Retirement benets.

 Military pay and benets other than

attendant-care and medical-aid

payments.

 Veterans benets other than

attendant-care payments,

medical-aid payments, veteran’s

disability compensation and

dependency and indemnity

compensation.

 Pension receipts. Include distributions

from retirement bonds and Keogh

plans. Include only the taxable

portion of Individual Retirement

Accounts (IRA’s).

 Business or rental income.

Depreciation cannot be deducted

and you may not deduct business or

rental losses or use those losses to

oset other income.

 Annuity receipts. For purposes

of this program, “annuity” is dened

as a series of payments, xed or

variable, under a contract or

agreement. A “series of payments”

means at least one payment per

period over more than one period.

WASHINGTON STATE DEPARTMENT OF REVENUE

A period can be a week, month,

or year. Payment amounts do not

have to be equal and payment

periods do not have to be

consecutive. Some examples

of annuity payments include:

proceeds from life insurance

contracts, unemployment

compensation, disability payments,

and welfare receipts (excluding

amounts received for the care of

dependent children).

 Interest and dividend receipts.

 Capital gains other than the gain

from the sale of your primary

residence that was reinvested in

another primary residence within

one year. Capital losses may not

be deducted from income or used

to oset capital gains.

If there was a change in your income

prior to November 1 that is expected to

last indenitely, you may estimate your

income. Multiply your new average

monthly income by 12.

Example: You retired in September and

your monthly income is reduced from

$2,000 to $1,000 beginning in October.

Multiply $1,000 x 12. The total, $12,000,

is your new estimated annual

disposable income.

Deductions from Disposable Income

To determine your combined

disposable income you may take

deductions for the following expenses

paid by you, your spouse, or your

domestic partner:

 Non-reimbursed amounts paid

for you, your spouse, or your

domestic partner to live in a nursing

home, boarding home, or adult

family home.

 Non-reimbursed amounts paid for

prescription drugs for you, your

spouse, or your domestic partner.

 Insurance premiums for Medicare

under Title XVIII of the Social

Security Act.

 Non-reimbursed amounts paid

for goods and services that allow

you, your spouse, or your domestic

partner to receive in-home care.

The care received must be similar

to the care provided by a nursing

home.

In-home care includes medical

treatment, physical therapy, Meals

on Wheels (or similar services), and

household and personal care.

Personal care includes assistance

with preparing meals, getting

dressed, eating, taking

medications, or personal hygiene.

Special furniture and equipment

such as wheelchairs, hospitals beds,

and oxygen also qualify.

Applying for the Exemption

Your county assessor administers

this program and is responsible

for determining if you meet the

qualications. Please contact your

local assessor’s oce to request

an application form.

If you want an exemption for taxes

due in 2016, your application is due

December 31, 2015. Your assessor

has the authority to accept late

applications and, because the

assessor uses your 2015 income

to determine whether you meet

the income requirements, most

assessors request that you wait

until you receive your year-end

income information to submit

your application.

Appeal Process

Your county assessor must notify

you in writing if your application

is denied. You may appeal the

assessor’s decision to the county

Board of Equalization. The county

Board of Equalization must receive

your appeal by July 1, or within 30

days of when the denial was mailed,

whichever date is later.

Refunds for Prior Years

If you paid prior years’ taxes because

of a mistake, oversight, or a lack of

knowledge about this program, you

may be eligible for a refund. You must

meet all of the qualications for the

exemption as if you had applied at the

time the application was due. Separate

applications must be submitted for

each of the tax years. In order to

receive a refund, applications must be

led within three years of the date the

taxes were due. Refunds will not be

made beyond the three years.

Renewal Applications Every

Six Years

A renewal application is required

at least once every six years. After

your initial application and approval,

you will be notied by your county

assessor when it is time to submit a

renewal application.

WASHINGTON STATE DEPARTMENT OF REVENUE

For tax assistance or to request

this document in an alternate

format, visit http://dor.wa.gov

or call 1-800-647-7706.

Teletype (TTY) users may call

(360) 705-6718.

Prepared by the Taxpayer Services Division

Frequently Asked Questions

Q. What if my circumstances

change?

A. A Change in Status Report must

be led with the assessor’s oce if

changes in your income or living

circumstances aect the exemption.

Change of Status Reports are

available from your county assessor

or on the Department of Revenue’s

website at dor.wa.gov under forms,

Property Tax.

Change in status includes:

 Death of the eligible applicant

(survivors must notify assessor)

 Change in income

 Sale or transfer of the property

 Move to an alternate primary

residence

 Change in disability status

 Change in zoning or land use

designation if your principle

residence includes more than

one acre of land

Q. In the event of my death, will

my surviving spouse or domestic

partner continue to receive the

exemption?

A. Your surviving spouse or domestic

partner may continue to receive the

exemption if he or she is at least 57

years old and meets all of the other

eligibility requirements.

Q: In the event of my death, will my

heirs have to repay the exemption

I received in previous years?

A: No. The exemption you receive

under this program is a “gift” and

does not have to be repaid. Upon

your death, the taxes will be

recalculated and pro-rated beginning

with the day after your death.

Laws and Rules

Revised Code of Washington (RCW)

Chapter 84.36 379-389—Exemptions

(Property Tax)

Washington Administrative Code

(WAC) Chapter 458-16A-100 through

150—Senior Citizen/Disabled

Persons Property, Tax Exemptions

For More Information

If you need help or have questions

regarding the property tax

exemption, application form, or the

application process, contact your

local county assessor’s oce. The

telephone number is listed in the

local county government pages

(usually the blue pages) of your

telephone book.

If you have questions about the

laws and rules governing this

program contact the Washington

State Department of Revenue at

(360) 534-1400.

Visit our website at

http://dor.wa.gov

01/16 PTFS0017EX

Q. If I sell my home, will the new

owner continue receiving the

exemption?

A. If you sell your home, the

exemption will continue through

your period of ownership. The taxes

will be recalculated without the

exemption for the remainder of the

tax year and the new owner will be

billed for the portion of taxes for his/

her period of ownership.

Q. Can my exemption be

transferred to a different

residence?

A. If you sell, transfer, or are otherwise

displaced from your residence, you

may transfer the exempt status

to a replacement residence. However,

you may not receive an exemption

on more than the equivalent

of one residence in any year. When

an exemption is transferred to a new

residence, the value of the new

residence is frozen as of January 1

of the year of change.

If you are moving to Washington,

you may transfer an exemption

from another state to your new

Washington residence, providing you

meet all other eligibility requirements

and provide proof of the prior

exemption and its cancellation date.

This material is intended for general information purposes and does not alter or supersede

any administrative regulations or rulings issued by the Department of Revenue.