Property taxes can create a unique problem for retirees. As property values go up, property taxes increase as well, but incomes may not keep up with the pace of tax increases. Washington state has responded to this issue by enacting tax relief policies for certain homeowners, including senior citizens. Unfortunately, the county assessor will not automatically let you know if you qualify for an exemption. It is up to you to review the eligibility requirements and then submit an application.
Under the senior citizen property tax exemption program the value of your residence is frozen for property tax purposes and you are exempt from all excess property taxes, Part 2 of the state school levy, and the portion of the voter approved regular levy if the exemption is identified in the ordinance. Depending on your income, you may also be exempt from a portion of the regular levies.
To qualify for the exemption, you must meet the following criteria:
A home owned jointly by a married couple, a registered domestic partnership, or by co-tenants is considered to be owned by each person therefore only one person must meet the age or disability requirement. The property must be your primary residence and you must live in the home for more than six months each year. Property used as a vacation home is not eligible for the exemption program.
The maximum amount of annual disposable income you may receive and qualify for the exemption is $40,000 or 65% of the county median household income. You can find the Washington state county income thresholds here. The disposable income you receive during the application year determines your eligibility. Disposable income includes all income regardless of whether the income is taxable for federal income tax purposes. Common sources of income may include social security, military pay, pension payments, rental income, retirement account distributions and annuity payments.
Certain deductions may help reduce your disposable income calculation such as non-reimbursed amounts paid to live in a nursing home, boarding home, or adult family home, non-reimbursed amounts paid for prescription drugs, non-reimbursed amounts paid for in-home care and insurance premiums for Medicare parts A, B, C and D for you, your spouse, or your domestic partner. For additional information on calculating disposable income, it is helpful to review the requirements provided by the Washington State Department of Revenue.
You may also be eligible for a refund for up to three years of past property taxes if you failed to request an exemption due to oversight, or a lack of knowledge about this program. You must meet all the qualifications for the exemption as if you had applied at the time the application was due and separate applications must be submitted for each of the tax years in which you qualified up to a maximum of three years. Refunds are not available beyond the three years.
Ultimately your county assessor administers this program and is responsible for determining if you meet the qualifications. For those of you here in Spokane county you can find the 2021 application form here. Applications are due by December 31st of the assessment year. If the county assessor approves your application, you will need to submit a renewal every three years and the assessor will notify you when you are due for renewal. If your application is denied the assessor will notify you in writing and you will have an opportunity for appeal.
No one enjoys paying more than required when it comes to property taxes. It can pay to get in touch with your county assessor in order to find out if you qualify for a discount on your property taxes.
Ty Strahl is the Spokane areas leading Certified Senior Advisor (CSA). Her job is to help navigate the many aspects of aging and to help seniors who are in transition to find the right solutions for their individual needs.