2021 Passed Property Tax Legislation


Property Tax Bills Passed in 2021 Regular Session

The following is a summary of the significant property tax legislation approved during the regular session of the 2021 Washington State Legislature. We have included links to the Legislature site for each bill that adopted. These sites give a very complete picture of how the measures moved through the legislative process and provide copies of the measures that have been enacted into law. We have also provided contact information for our staff members that may be involved in the implementation of the bill or the ongoing administration of related programs.

ESHB 1189 Authorizing tax increment financing for local governments
EHB 1271 Ensuring continuity of operations in the offices of county elected officials during the current COVID-19 pandemic and future public health crises
SHB 1309 Concerning the dates of certification of levies
ESHB 1332 Concerning property tax deferral during the COVID-19 pandemic
EHB 1386 Modifying the property tax exemption for the value of new construction of industrial/manufacturing facilities in targeted urban areas
ESHB 1410 Protecting taxpayers from home foreclosure
SHB 1438 Expanding eligibility for certain property tax relief programs by allowing deductions for common health care-related expenses
E2SSB 5287 Concerning affordable housing incentives
ESB 5454 Creating a property tax exemption for homes damaged by natural disasters

ESHB 1189 - Authorizing tax increment financing for local governments

This bill:

  • Establishes a tax increment financing (TIF) program for financing public improvements within a designated area by using increased revenues from local regular property taxes generated within that area.   
  • Excludes from TIF state property taxes, excess levies, and taxes levied by port districts or public utility districts specifically for making payment on bonds.
Effective July 25, 2021.

EHB 1271 - Ensuring continuity of operations in the offices of county elected officials during the current COVID-19 pandemic and future public health crises

Relevant to the Department of Revenue, this bill:

  • Replaces the requirement for county assessors to physically inspect real property with a requirement to review the characteristics of real property in accordance with the International Association of Assessing Officers standards for physical inspection.
  • Provides that when the total amount of personal property taxes due for a year is at least $50 and at least half of those taxes are paid after April 30 of that year (after the due date for the first tax payment), along with applicable interest and penalties, the remainder is due by October 31 of that year, and is delinquent after that date.
These provisions of EHB 1271 take effect July 25, 2021.

SHB 1309 - Concerning the dates of certification of levies

  • Extends the due date from November 30 to December 15 for a county legislative authority (CLA) to certify the county levy amount to the county assessor.
  • Extends the due date from November 30 to the first Monday in December for a CLA to certify levy amounts to the county assessor for taxes levied on behalf of taxing districts within or adjacent to the county.
  • Clarifies that the county assessor may not certify a levy amount that exceeds the previous year’s certified levy amount for a taxing district whose levy was certified to the county assessor after the deadlines mentioned above.
Effective July 25, 2021.

ESHB 1332 - Concerning property tax deferral during the COVID-19 pandemic

  • Requires a county treasurer to extend payment of property taxes otherwise due on April 30, 2021, via a payment plan for eligible taxpayers due to the state of emergency related to COVID-19 if all of the following conditions are met:
    • The property is used for business purposes.
    • The owner can demonstrate at least a 25% loss of revenue in 2020, compared to calendar year 2019.
    • The owner requests an extension by April 30, 2021.
  • Allows county treasurers to determine the payment schedule and plan, requiring that no penalties or interest apply to taxes due under the payment plan if the taxpayer fully complies with the payment plan.
  • Requires that an owner must pass the entire benefit of the payment plan to the tenant if the tenant is responsible for payment of the property taxes.
  • Allows a county treasurer to deny extensions within its county if granting such extensions will prevent any taxing jurisdiction from making scheduled bond payments.
  • Requires county treasurers to process all requests for extension by June 30, 2021.
Effective April 16, 2021.

EHB 1386 – Modifying the property tax exemption for the value of new construction of industrial/manufacturing facilities in targeted urban areas

  • This bill revises the existing 10-year local property tax exemption for the value of new construction improvements for industrial or manufacturing facilities in targeted urban areas as follows:
  • Expands eligibility to allow any city or town to offer the exemption.
  • Provides certain labor specifications that must be given priority by a city when evaluating applications for the exemption.
  • Expands the definition of family living wage jobs to mean a job that offers health care benefits and pays an average of at least $23 per hour to qualify for the exemption.
  • Allows a city to limit the exemption to facilities for manufacturing uses.
  • Extends the deadline to apply for an exemption from December 31, 2022, to December 31, 2030.
Effective July 25, 2021.

ESHB 1410 – Protecting taxpayers from home foreclosure

  • Eliminates penalties on delinquent property taxes for residential parcels with four or fewer units beginning January 1, 2022.
  • Creates a penalty moratorium for all other properties from January 1, 2022, through December 31, 2022.
  • Reduces interest on delinquent property taxes to 9% for residential parcels with four or fewer units beginning January 1, 2023, while all other properties continue to be subject to interest on delinquent property taxes at the rate of 12% per annum.
  • Appears to have inadvertently eliminated penalties and interest on delinquent personal property taxes.
Effective January 1, 2022.

SHB 1438 – Expanding eligibility for certain property tax relief programs by allowing deductions for common health care-related expenses

  • This bill adds a number of new medical costs that may be deducted when calculating "combined disposable income" for purposes of determining eligibility in the following property tax relief programs:
  • Senior citizen and people with disabilities property tax exemption program.
  • Senior citizen and people with disabilities property tax deferral program.
  • Widows and widowers of veterans property tax grant program.
  • Limited income property tax deferral program.
  • Newly deductible costs include, but are not limited to, the costs of Medicare supplemental insurance, durable medical equipment, mobility enhancing equipment, prosthetic devices, and naturopathic medicines. 
Effective July 25, 2021.

E2SSB 5287 - Concerning affordable housing incentives

  • This bill makes numerous changes to the multi-family property tax exemption (MFTE), including:
  • Creating two new 20-year property tax exemptions in cities meeting certain criteria for properties that meet certain conditions.
  • Authorizing, until December 31, 2026, cities not otherwise eligible to offer the existing MFTE, to offer the 12-year exemption for properties that meet certain affordability requirements and are located in areas that meet certain density requirements.
  • Allowing 12-year extensions to the existing 8- and 12-year MFTE exemptions, if the projects meet affordability requirements.
  • Prohibiting the approval of new exemptions beginning January 1, 2032, and the granting of extensions beginning January 1, 2046.
  • Requiring relocation assistance to qualifying tenants at the end of the 12-year exemption or 12-year extension, unless certain affordability requirements are maintained.
  • Decreasing the required unincorporated population for qualifying counties to 170,000.
  • Allowing the use of the median family income for the city or metropolitan statistical area where the project is located, as alternatives to using the median family income for the county where the project is located, in determining whether a household is a low- or moderate-income household.
  • Defining “multiple-unit housing” to allow for groups of buildings to qualify as long as the total number of dwelling units is four or more.
Effective July 25, 2021.

ESB 5454 -  Creating a property tax exemption for homes damaged by natural disasters

  • This bill establishes a new three-year property tax exemption for improvements to single-family dwellings that have been damaged, and suffered a loss in assessed value of more than 20%, due to a natural disaster.
  • The exemption cannot exceed the amount of the reduction in value resulting from the damage to, or destruction of, the property. This can include a complete re-build of a destroyed home.
  • Qualifying properties must be located in a disaster area declared by the governor or a county legislative authority.
  • Property owners must apply for the exemption with the county assessor. The county assessor may not approve any applications for exemptions received after June 30, 2026.
ESB 5454 takes effect July 25, 2021.