The following is a summary of the significant property tax legislation approved during the regular session of the 2025 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.

HB 1094 - Property Used for Social Services

This bill provides a property tax exemption for property that is owned by a qualifying nonprofit organization and loaned, leased, or rented to and used by any government entity or another nonprofit to provide character-building, benevolent, protective, or rehabilitative social services.

This bill takes effect July 27, 2025, and applies to property taxes due in 2026 and after.

Chapter 16,
Laws of 2025

EHB 1106 - Disabled Veterans Property Tax Exemption

This bill reduces the combined service-connected evaluation rating percentage for disabled veterans to qualify for a property tax exemption from 80% to 40%.

This bill takes effect July 27, 2025, and applies to property taxes due in 2027 and after.

Chapter 200,
Laws of 2025

SHB 1261 - Incidental Uses of Open Space Farm and Agricultural Land

This bill adds the wholesale value of agricultural products sold to consumers participating in harvest-your-own operations to the calculation of income that qualifies land for the open space farm and agricultural land classification. This bill allows minor upgrades and alterations to appurtenances (such as cement pads, plumbing, electrical) and limited compatible uses (such as hosting celebrations) without loss of the agricultural land classification, so long as the incidental uses do not exceed 20% of the classified land. The land may be removed from open space and agricultural classification if the other uses exceed 20% of the land or the upgraded structures no longer qualify as appurtenances that remain tied to the land.

The bill takes effect July 27, 2025. Beginning September 1, 2025, the additional tax due for open space farm and agricultural land classification removal or withdrawal is reduced to four years of back taxes.

Chapter 138,
Laws of 2025

SHB 1488 - Conservation Districts - Parcel Rates

This bill increases the maximum annual per-parcel rate charge for conservation district special assessments to $25 per parcel from the existing maximum rates of $5 to $15 per parcel, depending on the county’s population. This bill also requires the Department of Revenue to update the rates for inflation every three years, beginning in March 2029. This bill takes effect July 27, 2025.

Chapter 262,
Laws of 2025

3SHB 1491 - Transit-Oriented Housing Development

As it relates to the Department of Revenue, this bill creates a 20-year multi-family tax exemption (MFTE) from property tax for properties fully or partially within a transit station area to promote transit-oriented development. Exempted properties also must meet affordability requirements for 50 years. This bill takes effect July 27, 2025; sections 12-19 apply to property taxes due in 2026 and after.

Chapter 267,
Laws of 2025

HB 1494 - Multiple Unit Dwellings

The Multi-Family Housing Property Tax Exemption (MFTE) program provides a property tax exemption in exchange for the development of multifamily and affordable housing in designated “residential targeted areas.” To encourage affordable housing development, certain cities, towns, and counties may authorize up to 20-year exemptions, with varying requirements based on affordability and infrastructure.

This bill amends the MFTE exemption criteria to require certain covenants and deed restrictions, allow households to continue living in income-restricted units if their income increases, eliminate some density restrictions, eliminate maximum population limits for certain exemptions, and allow more exemptions near transit or higher education institutions. This bill takes effect on July 27, 2025.

Chapter 164,
Laws of 2025

ESHB 2049 - K-12 Education Funding

This bill increases the maximum per-pupil limit for local school enrichment levies over several years, as calculated by the Office of Superintendent of Public Instruction (OSPI). This bill also requires OSPI to convene a K-12 funding equity workgroup to analyze options for revising K-12 funding formulas. The bill contains several effective dates.

Chapter 404,
Laws of 2025

SSB 5221 - Personal Property Distraint - Process and Timelines

• Allows the county treasurer to cancel personal property taxes, including taxes for a titled manufactured or mobile home, if the cost of collection and distraint is more than the tax amount due.
• Removes the requirement that counties pay property owners any excess amount received in a distraint sale.
• Requires the property owner to apply for a refund within three years to receive the excess amount, or it will be deposited in the county’s current expense fund.

This bill takes effect July 27, 2025.

Chapter 130,
Laws of 2025

ESSB 5445 - Agrivoltaic Facilities

Relevant to the Department of Revenue, the bill allows farms and agricultural land classified under the Open Space Taxation Act (i.e. “current use program”) to operate agrivoltaic facilities if designed to be operated with continued agricultural use of the land.

The bill specifies that the addition of an agrivoltaic facility cannot create the basis for removal or withdrawal from the program. The bill takes effect on July 27, 2025.

Chapter 265,
Laws of 2025

SSB 5516 - Community Center Property Tax Exemption

This bill expands the property tax exemption for community centers by including surplus property of an exempt nonprofit university acquired by a nonprofit organization for the purposes of converting the property into a community center.

This bill takes effect July 27, 2025, and applies to property taxes due in 2026 through 2035.

Chapter 340,
Laws of 2025

ESB 5529 - Accessory Dwelling Units (ADUs)

This bill authorizes additional counties (population more than 900,000) and cities within those counties to enact property tax exemptions for accessory dwelling units (ADUs) that are rented to low-income tenants and satisfy other requirements. The bill takes effect on July 27, 2025, beginning with property taxes due for calendar year 2026, and expires in 2034.

Chapter 207,
Laws of 2025

ESSB 5801 - Local Tax Increment Finance Areas

 

A local government sponsoring a local tax increment finance (LTIF) area that funds certain public improvements may exceed assessed value limitations ($200 million or 20% of the total value for the sponsoring jurisdiction, whichever is less) when the assessed value is greater than $200 million but no more than $500 million in 2026, and if the sponsoring jurisdiction is:

• A city with a population of more than 150,000 but less than 170,000 people.
• In a county with a population of more than 1.5 million.
• An LTIF area connected to Interstate 405.
• The transportation-related public improvements enhance the integration and connection of neighborhoods adjacent to the LTIF area.
• The governing body of a taxing district location within the LTIF increment area approves its participation, in full or in part, to apportionment of tax revenues.

If a taxing district’s governing authority does not approve the district’s participation in the project funded by the LTIF, then the taxing district may not increase its regular annual property tax levy by an additional amount from real property within an LTIF area. This section of the bill takes effect on July 27, 2025.

Chapter 417,
Laws of 2025