Washington Administrative Code
Title 458 - Revenue, Department of
Chapter 458-16 - Property tax Exemptions
Section 458-16-080 - Improvements to single family dwellings-Definitions-Exemption-Limitation Appeal rights
Current through Register Vol. 23-24, December 15, 2023
(1) Introduction. This rule explains the property tax exemption available to taxpayers when they make physical improvements to their single family dwelling under the provisions of RCW 84.36.400. It explains the process by which this exemption is obtained and how the amount of the exemption is calculated.
(2) Definitions. For purposes of this rule, the following definitions apply:
(3) Exemption - Taxpayer's obligations. Physical improvements to a single family dwelling upon real property are exempt from property tax for three assessment years after the improvements are completed. The amount of the exemption is the difference between the true and fair value of the dwelling before and after the physical improvement. However, the amount of the exemption cannot exceed thirty percent of the true and fair value of the dwelling prior to the improvements.
(4) Assessor's duties. Upon receipt of a taxpayer's claim for exemption, the assessor will determine the true and fair value of the unimproved dwelling. This value may be determined by means of a physical inspection and appraisal or a statistical update of the value shown on the county's current assessment roll. After receiving a notice of completion from the taxpayer, the assessor will revalue the improved dwelling by means of a physical inspection to determine the amount of the exemption.
(5) Amount of exemption. The amount of the exemption is the difference between the dwelling's true and fair value before and after improvements, but this amount cannot exceed thirty percent of the true and fair value of the original unimproved dwelling. In other words, the amount of the exemption is determined by subtracting the true and fair value of the unimproved dwelling from the true and fair value of the dwelling including improvements. The cost of the physical improvements is not the basis for the exemption granted under RCW 84.36.400 and, as a result, the exemption granted is not normally equivalent to the costs incurred by the taxpayer.
True & fair value of dwelling prior to improvements . . . . . . . . . . . . |
$150,000 |
|
True & fair value of improved dwelling . . . . . . . . . . . . |
$200,000 |
|
Difference (value of physical improvements) . . . . . . . . . . . . |
$50,000 |
|
Amount of exemption . . . . . . . . . . . . |
$45,000 |
|
The difference between the value of the improved dwelling and the value of the unimproved dwelling ($50,000) or 30% of the unimproved dwelling ($150,000 x 30% = $45,000), whichever is less. |
||
The assessed value of the improved dwelling will be reduced by $45,000 for the next three assessment years (1999, 2000, and 2001). |
(6) Limitation. This exemption may not be claimed on the same dwelling more than once in a five-year period. This five-year period begins the first year the exemption appears on the county's assessment roll. (In the example above, the taxpayer may not file another claim for an exemption on this dwelling under RCW 84.36.400 until 2003.)
(7) Relationship to revaluation cycle. Chapter 84.41 RCW requires each county to establish and maintain a systematic program to revalue all taxable real property within the county on an annual basis.
When an exemption has been granted under RCW 84.36.400, the dwelling is revalued during the three assessment years the exemption is in effect, but the amount of the exemption will remain unchanged.
(8) Exemption in relationship to destroyed property. If the value of a dwelling has been reduced under the provisions of chapter 84.70 RCW because it was destroyed, the dwelling is ineligible to receive the exemption authorized by RCW 84.36.400.
(9) Right to appeal. A taxpayer who applies for an exemption under RCW 84.36.400 may file an appeal with the county board of equalization under the following circumstances:
Amended by WSR 18-04-007, Filed 1/25/2018, effective 2/25/2018
Statutory Authority: RCW 84.36.400 and 84.36.365. 00-09-004, § 458-16-080, filed 4/5/00, effective 5/6/00; Order PT 75-3, § 458-16-080, filed 5/23/75.