Property tax exemptions

AN ACT Relating to expanding access to the property tax exemption 1
program for seniors, people retired due to disability, and veterans 2
with disabilities; amending RCW 84.36.383; and creating new sections.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
Sec. 1. RCW 84.36.383 and 2024 c 119 s 1 are each amended to 5
read as follows: 6
As used in RCW 84.36.381 through 84.36.389, unless the context 7
clearly requires otherwise: 8
(1) "Accessory dwelling unit" means a separate, autonomous 9
residential dwelling unit that provides complete independent living 10
facilities for one or more persons and includes permanent provisions 11
for living, sleeping, eating, cooking, and sanitation.12
(2) "Combined disposable income" means the disposable income of 13
the person claiming the exemption, plus the disposable income of his 14
or her spouse or domestic partner, and the disposable income of each 15
cotenant occupying the residence for the assessment year, less 16
amounts paid by the person claiming the exemption or his or her 17
spouse or domestic partner during the assessment year for:18
(a) Drugs supplied by prescription of a medical practitioner 19
authorized by the laws of this state or another jurisdiction to issue 20
prescriptions; 21
H-0317.2
HOUSE BILL 1165
State of Washington 69th Legislature 2025 Regular Session
By Representatives Shavers, Wylie, Ryu, Callan, and Goodman
Prefiled 01/06/25. Read first time 01/13/25. Referred to Committee
on Finance.
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(b) The treatment or care of either person received in the home 1
or in a nursing home, assisted living facility, or adult family home;2
(c) Health care insurance premiums for medicare under Title XVIII 3
of the social security act; 4
(d) Costs related to medicare supplemental policies as defined in 5
Title 42 U.S.C. Sec. 1395ss; 6
(e) Durable medical equipment, mobility enhancing equipment, 7
medically prescribed oxygen, and prosthetic devices as defined in RCW 8
82.08.0283; 9
(f) Long-term care insurance as defined in RCW 48.84.020;10
(g) Cost-sharing amounts as defined in RCW 48.43.005;11
(h) Nebulizers as defined in RCW 82.08.803; 12
(i) Medicines of mineral, animal, and botanical origin 13
prescribed, administered, dispensed, or used in the treatment of an 14
individual by a person licensed under chapter 18.36A RCW;15
(j) Ostomic items as defined in RCW 82.08.804;16
(k) Insulin for human use; 17
(l) Kidney dialysis devices; and 18
(m) Disposable devices used to deliver drugs for human use as 19
defined in RCW 82.08.935. 20
(3) "Cotenant" means a person who resides with the person 21
claiming the exemption and who has an ownership interest in the 22
residence. 23
(4) "County median household income" means the median household 24
income estimates for the state of Washington by county of the legal 25
address of the principal place of residence, as published by the 26
office of financial management. 27
(5) "Department" means the state department of revenue.28
(6) "Disability" has the same meaning as provided in 42 U.S.C. 29
Sec. 423 (d)(1)(A) as amended prior to January 1, 2005, or such 30
subsequent date as the department may provide by rule consistent with 31
the purpose of this section. 32
(7) "Disposable income" means adjusted gross income as defined in 33
the federal internal revenue code, as amended prior to January 1, 34
1989, or such subsequent date as the director may provide by rule 35
consistent with the purpose of this section, plus all of the 36
following items to the extent they are not included in or have been 37
deducted from adjusted gross income: 38
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(a) Capital gains, other than gain excluded from income under 1
section 121 of the federal internal revenue code to the extent it is 2
reinvested in a new principal residence; 3
(b) Amounts deducted for loss; 4
(c) Amounts deducted for depreciation; 5
(d) Pension and annuity receipts; 6
(e) Military pay and benefits other than attendant-care and 7
medical-aid payments; 8
(f) Veterans benefits, other than: 9
(i) Attendant-care payments; 10
(ii) Medical-aid payments; 11
(iii) Disability compensation, as defined in Title 38, part 3, 12
section 3.4 of the Code of Federal Regulations, as of January 1, 13
2008; and 14
(iv) Dependency and indemnity compensation, as defined in Title 15
38, part 3, section 3.5 of the Code of Federal Regulations, as of 16
January 1, 2008; 17
(g) Federal social security act and railroad retirement benefits;18
(h) Dividend receipts; and 19
(i) Interest received on state and municipal bonds.20
(8) "Income threshold 1" means: 21
(a) For taxes levied for collection in calendar years prior to 22
2020, a combined disposable income equal to $30,000;23
(b) For taxes levied for collection in calendar years 2020 24
through 2023, a combined disposable income equal to the greater of 25
"income threshold 1" for the previous year or 45 percent of the 26
county median household income; ((and))27
(c) For taxes levied for collection in calendar year s 2024 ((and 28
thereafter)) through 2026, a combined disposable income equal to the 29
greater of "income threshold 1" for the previous year or 50 percent 30
of the county median household income ((, adjusted every three years 31
beginning August 1, 2023, as provided in RCW 84.36.385(8))); and32
(d) For taxes levied for collection in calendar years 2027 and 33
thereafter, a combined disposable income equal to the greater of 34
"income threshold 1" for the previous year or 55 percent of the 35
county median household income, adjusted every three years beginning 36
August 1, 2023, as provided in RCW 84.36.385(8). 37
(9) "Income threshold 2" means: 38
(a) For taxes levied for collection in calendar years prior to 39
2020, a combined disposable income equal to $35,000;40
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(b) For taxes levied for collection in calendar years 2020 1
through 2023, a combined disposable income equal to the greater of 2
"income threshold 2" for the previous year or 55 percent of the 3
county median household income; ((and))4
(c) For taxes levied for collection in calendar year s 2024 ((and 5
thereafter)) through 2026, a combined disposable income equal to the 6
greater of "income threshold 2" for the previous year or 60 percent 7
of the county median household income ((, adjusted every three years 8
beginning August 1, 2023, as provided in RCW 84.36.385(8))); and9
(d) For taxes levied for collection in calendar years 2027 and 10
thereafter, a combined disposable income equal to the greater of 11
"income threshold 2" for the previous year or 65 percent of the 12
county median household income, adjusted every three years beginning 13
August 1, 2023, as provided in RCW 84.36.385(8). 14
(10) "Income threshold 3" means: 15
(a) For taxes levied for collection in calendar years prior to 16
2020, a combined disposable income equal to $40,000;17
(b) For taxes levied for collection in calendar years 2020 18
through 2023, a combined disposable income equal to the greater of 19
"income threshold 3" for the previous year or 65 percent of the 20
county median household income; ((and))21
(c) For taxes levied for collection in calendar year s 2024 ((and 22
thereafter)) through 2026, a combined disposable income equal to the 23
greater of "income threshold 3" for the previous year or 70 percent 24
of the county median household income ((, adjusted every three years 25
beginning August 1, 2023, as provided in RCW 84.36.385(8))); and26
(d) For taxes levied for collection in calendar years 2027 and 27
thereafter, a combined disposable income equal to the greater of 28
"income threshold 3" for the previous year or 75 percent of the 29
county median household income, adjusted every three years beginning 30
August 1, 2023, as provided in RCW 84.36.385(8). 31
(11) "Principal place of residence" means a residence occupied 32
for more than six months each calendar year by a person claiming an 33
exemption under RCW 84.36.381. 34
(12) The term "real property" also includes a mobile home which 35
has substantially lost its identity as a mobile unit by virtue of its 36
being fixed in location upon land owned or leased by the owner of the 37
mobile home and placed on a foundation (posts or blocks) with fixed 38
pipe, connections with sewer, water, or other utilities. A mobile 39
home located on land leased by the owner of the mobile home is 40
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subject, for tax billing, payment, and collection purposes, only to 1
the personal property provisions of chapter 84.56 RCW and RCW 2
84.60.040. 3
(13) The term "residence" means a single-family dwelling unit 4
whether such unit be separate or part of a multiunit dwelling, may 5
include one accessory dwelling unit and includes the land on which 6
such dwellings stand not to exceed one acre, except that a residence 7
includes any additional property up to a total of five acres that 8
comprises the residential parcel if this larger parcel size is 9
required under land use regulations. The term also includes a share 10
ownership in a cooperative housing association, corporation, or 11
partnership if the person claiming exemption can establish that his 12
or her share represents the specific unit or portion of such 13
structure in which he or she resides. The term also includes a 14
single-family dwelling situated upon lands the fee of which is vested 15
in the United States or any instrumentality thereof including an 16
Indian tribe or in the state of Washington, and notwithstanding the 17
provisions of RCW 84.04.080 and 84.04.090, such a residence is deemed 18
real property. 19
NEW SECTION. Sec. 2. This act applies to taxes levied for 20
collection in 2027 and thereafter.21
NEW SECTION. Sec. 3. RCW 82.32.805 and 82.32.808 do not apply 22
to this act.23
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