Property Tax Deferral for Senior Citizens and People with Disabilities
The Property Tax Deferral for Senior Citizens and People with Disabilities Program postpones payment of your property taxes or special assessments. Unlike the exemption program, this program is not a reduction of your taxes. The Department of Revenue pays the deferred property taxes and special assessments on your behalf to your local Treasurer.
Special Assessment
A special assessment is for a local improvement that directly benefits your property. Examples include assessments for sewers, lights, water, paving or curbing. Special assessments are also known as Local Improvement Districts (LlDs) or Utility Local Improvement Districts (ULlDs).
Liens
The amount of the postponed taxes and/or special assessments, plus 5% interest per year (8% prior to Jan. 1, 2007), becomes a lien by the state until you pay the total amount. The lien, filed with the County Auditor, shows the State of Washington as having an interest in your property.
Eligibility Requirements
What Property is Eligible
The exemption and deferral are available for your principal home and up to 5 acres of land. Mobile homes may qualify as residences for both programs even if the applicant does not own the land where the mobile home is located.
Ownership
You must own the property in total (fee owner) or under a contract purchase. The lien holder or beneficiary must co-sign the application for deferral if the mortgage or purchase contract requires a reserve account for the payment of taxes. You are not eligible to defer your taxes if you have a life estate, lease for life, or share ownership in a cooperative housing unit.
Age or Disability
You must be at least 60 years old or disabled from gainful employment on December 31st of the application year, the year prior to the property taxes being paid.
Residency
The property must be your principal place of residence on the date of your application. You must occupy the home for at least 9 months each year.
Property used as a vacation home is not eligible for the program.
Household Income
To qualify for this program, your annual household for 2019, and forward, income may not exceed $48,511. If you would qualify for the exemption program, you must first apply for the exemption program.
Insurance
You need to keep in force a fire and casualty insurance policy in an amount enough to protect the interest of the State of Washington. The insurance policy must show the State of Washington as loss payee. You must provide the Department of Revenue with a copy of the policy within 60 days of application. If you do not carry insurance, you may only defer property taxes and special assessments based on the amount of equity you have in the property using only the land value.
Amount Eligible for Deferral
The amount of equity you have in your home determines the amount of property taxes and/or special assessments eligible for deferral. Equity is the difference between the assessed value of the property and all debts secured by the property. You must provide current balances for all debts that are secured by the property.
Providing you meet all qualifications and maintain adequate fire and casualty insurance, you may defer taxes and special assessments in an amount up to 80 percent of your equity.
How to Apply
Filing Period
You should submit an application and additional documentation at least 30 days before payment of property taxes and/or special assessments are due. If you apply late, the County or City Treasurer will assess late penalties and interest. Late penalties and interest will increase the amount of the lien filed by the state. If you are applying to stop the County Treasurer from foreclosing for unpaid taxes, you must apply within 30 days of receiving the foreclosure notice.
Annual Application
You must apply each year you want to defer taxes or special assessments.
Signing the Application
You must sign the application. If the contract purchase agreement, deed of trust, or mortgage requires a reserve account for the payment of property taxes, the lien holder’s notarized signature must also be on the application.
When Deferred Amounts Must Be Paid
The deferred amount and interest must be paid when:
- The property is transferred or conveyed to someone else
- You pass away, unless your spouse qualifies for the deferral and files an application with the County Assessor within 90 days of your death
- You no longer permanently reside at the residence
- Fire and casualty insurance is not kept in an amount sufficient to protect the interest of the state and the deferred amount exceeds 100% of equity of the land value
- The deferred amount, plus interest, exceeds 80% of the equity in the insured value of the residence plus the land value