Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Finance Committee |
HB 1439
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Concerning property tax deferral eligibility for senior citizens and persons retired because of disability.
Sponsors: Representatives Kelley, Seaquist, Orwall, Green, Morrell, Rolfes, Dickerson and Driscoll.
Brief Summary of Bill |
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Hearing Date: 2/13/09
Staff: Rick Peterson (786-7150)
Background:
Some senior citizens and persons retired due to disability are entitled to property tax relief on their principal residences. To qualify a person must be 61 in the year of application or retired from employment because of a disability, own his or her principal residence, and have a disposable income of less than $35,000 a year. Persons meeting this criteria are entitled to partial property tax exemptions and a valuation freeze.
In addition to the exemption program, eligible persons of age 60 with incomes less than $40,000 may defer taxes. Taxes may be deferred up to 80 percent of the homeowner's equity. Taxes that are deferred become a lien against the property and accrue interest at 5 percent per year. If deferred taxes are not repaid within three years after the claimant ceases to own and live in the residence, the lien will be foreclosed and the residence sold to recover the taxes.
Disposable income is the sum of their federally-defined adjusted gross income and the following if not already included: capital gains, deductions for loss, depreciation, pensions and annuities, military pay and benefits, veterans' benefits except attendant-care, medical-aid payments, and disability compensation; Social Security and federal railroad retirement benefits, dividends, and interest income. Payments for the care of either spouse received in the home, a nursing home, boarding home, or adult family home, as well as payments for Medicare insurance premiums and prescription drugs are deducted in determining disposable income.
Partial exemptions for senior citizens and persons retired due to disability are provided as follows:
If the income level is $30,001 to $35,000, all excess levies are exempted.
If the income level is $25,001 to $30,000, all excess levies and regular levies on the greater of $50,000, or 35 percent of assessed valuation ($70,000 maximum), are exempted.
If the income level is $25,000 or less, all excess levies and regular levies on the greater of $60,000, or 60 percent of assessed valuation, are exempted.
In addition to the partial exemptions listed above, the valuation of the residence of an eligible senior citizen or disabled person is frozen at the assessed value of the residence on January 1 of the assessment year the person first qualifies for the program.
Summary of Bill:
The income threshold for the senior citizens and persons retired due to disability deferral program is increased to $100,000. Participants with income between $40,000 and $100,000 may defer taxes up to 80 percent of the participant's equity but not more than $200,000.
Appropriation: None.
Fiscal Note: Available
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.