Property Tax Deferral for Homeowners with Limited Income

The purpose of the deferral program is to provide a property tax safe harbor for families in economic crisis and prevent existing homeowners from being driven from their homes because of rising property taxes.

Deferral programs are a postponement of the taxes. The deferred amount accrues simple interest until repayment is complete.  The interest rate varies and is based on an average of the federal short-term rate, plus 2 percent.The State of Washington pays the taxes for the applicant and files a lien to secure the State’s interest in the property. When you no longer own and use the property as your personal residence you must repay the deferred tax.

This deferral program is only applicable to property taxes and special assessments billed on the regular annual tax statement. Under the program laws, the applicant can request payment of the second half of the regular property tax installment due in October.

  1. Eligibility Requirements
  2. Application Process

To qualify for deferral on taxes payable in 2020:

  1. The application must be filed by September 1st, 2020.
  2. Combined disposable income must not exceed $57,000 in 2019. 
  3. The applicant must have owned the home since at least December 31, 2015.You must own your home for more than five years before you can apply for a deferral, and the home must be your primary residence when you apply for a deferral. 
  4. The applicant must live in the home as of January 1, 2020 and must have lived there for more than nine months in 2019.
  5. The applicant must have paid the first half taxes due April 30th, 2020.
  6. The applicant must have and maintain sufficient equity to protect the interest of the State of Washington in the residence. Equity is the difference between the assessed value of the property and any debts secured by the property. Debts include mortgages, lines of credit, special assessments, and any other liens against the property. The taxes deferred cannot exceed 40 percent of your equity.
  7. You must carry fire and casualty insurance, and the State of Washington Department of Revenue must be listed as a “Loss Payee” on your policy, otherwise, we cannot include the value of your dwelling in the calculation. Provide a copy of the summary declaration for your policy when you submit your application. 
  8. The applicant may not apply for deferral under this program and the deferral program for senior citizens and disabled persons in the same tax year.