More Washington homeowners have a chance to save on their property tax bills this year and thousands are taking local governments up on the offer.
After a recent state law change, a long-standing property tax break program for older homeowners and people with disabilities is now open to people with higher incomes, making more Washingtonians eligible. In King County, for example, the change boosted the income limit for the program by 44% this year. Homeowners making up to $84,000 can now qualify.
The flood of applicants seeking tax assistance underscores the financial squeeze Washingtonians are feeling. As costs climb for everyday needs from groceries to insurance, even those with the financial security of homeownership in one of the country’s most expensive housing markets are looking to tighten their budgets.
“Folks are trying to find whatever way they can to try and keep their costs down,” said Christina Clem, spokesperson for AARP Washington, which lobbied to expand the property tax exemption to more homeowners and has encouraged tens of thousands of its members to apply.
“Even if you have your home paid off, if you can’t afford the property taxes, that’s a problem,” Clem said.
Counties across Washington have long offered property tax discounts for low-income homeowners who are at least 61 years old when they apply or unable to work because of a disability. The program exempts homeowners from certain levies.
As inflation climbed in recent years, the definition of low income shifted.
The state switched in 2020 from a flat $40,000 income limit to varying income levels by county. That allowed homeowners in high-cost areas like King County to have higher incomes and still qualify for tax relief. Last year, legislators increased those income limits for the 2024 tax year, in part because they worried a boost in Social Security payments would prevent some homeowners from qualifying even as they still struggled with living costs.
Together, the two changes have more than doubled the income a King County homeowner can earn and still qualify for the program. And homeowners appear to be taking notice.
King County has received nearly 6,600 applications so far this year, more than the total in the entire year of 2023.
It’s the same story in Kitsap, where more than 900 people have applied so far, more than any other year in the last decade. Snohomish County received about 3,700 applications in the first five months of this year, more than double the number during the same time period last year.
Pierce County hasn’t seen as large of a jump in applications, but the county’s assessor-treasurer Mike Lonergan said he expects the number of people receiving a tax break under the program to climb by nearly 40% over the next year.
Even before this year, inflation had already pushed more people to apply for the tax break, Lonergan said. The county is now “doing everything we can” to get the word out about the new income limits.
When homeowners qualify for a property tax exemption, the program freezes their home value and exempts them from certain levies to lower their tax bill. People with lower gross incomes receive larger exemptions. Income limits for the smallest exemption now range from $64,000 in Pierce and $65,000 in Kitsap to $75,000 in Snohomish and $84,000 in King.
Eligible homeowners with slightly higher incomes can also qualify for tax deferrals, which allow them to postpone paying part of their property taxes until they sell or move out.
The owner of a median Seattle home owes about $7,300 in taxes this year, up 3.5% from a year ago, according to county data.
Counties are not losing revenue through the exemptions. Because of the “budget-based” way Washington counties calculate property tax bills, a greater number of people getting a break on their taxes means the cost to replace that lost tax revenue shifts to other property owners.
The number of people receiving tax exemptions under the program, about 25,000 in King County, is a fraction of the county’s total taxpayers, so the tax shift is a “very small amount,” said Chief Deputy Assessor Al Dams. Properties where owners receive an exemption are worth about $127 million out of the total $850 billion worth of taxable property in the county.
In other ways, though, the uptick in applications is stressing government resources.
After the 2020 increase in the program’s income limits, a King County audit found that applicants waited a median of eight months to hear a decision on their application and even longer to receive refund checks, “delaying financial relief for residents.” The office faced a backlog of more than 3,700 applications by the end of 2021.
Auditors made a series of recommendations in 2022 to improve staffing and application processing. A year later, auditors found the county had made some progress on the recommendations, but property owners were still waiting the same amount of time to have their applications for tax relief processed.
Today, the county is working through a backlog of more than 4,000 applications and taxpayers are generally waiting about three months for the county to process their applications, with some outliers, Dams said. The backlog is well above the 2,500 applications auditors described as “manageable,” but Dams said technical changes now allow the department to sort and process applications faster.
As the county stares down a budget crunch this year, the department does not plan to request more staff for the tax exemption program. For homeowners planning to apply, assessors across the region recommend applying online to speed up processing.
In Snohomish County, more than 2,500 applications are sitting in the backlog, and in Pierce County, the assessor’s office added an extra staffer to handle an expected uptick, though application levels haven’t spiked there. Instead, the office is processing applications faster than a year ago.
Assessors are bracing for applications to continue to climb. King County Assessor John Wilson told AARP this spring that as many as 30,000 King County homeowners may be eligible for the tax exemption but not using it.
As more people face high costs of living and learn about tax assistance programs, Clem also expects more applications: “I can’t see our housing costs going down.”
