Exemption for Physical Improvement to a Single Family Dwelling
When you decide to make home improvements through remodeling and additions, there is a three-year property exemption program available. According to RCW 84.36.400, physical improvements to a single family dwelling upon real property are exempt from property tax for three assessment years after the improvements are completed to the extent that the improvement represents 30% or less of the value of the original structure.
Single family dwelling means a detached dwelling unit and the lot on which the dwelling stands which is designed for, and not occupied by, more than one family.
Physical improvement means any addition, remodeling, renovation, structural correction or repairs which materially adds to the value or condition of an existing dwelling, including the addition of, or repairs to, garages, carports and patios attached to and compatible with the dwelling. Improvements for tax exemption purposes do not include swimming pools, golf greens, fences, outbuildings, or general maintenance.
The homeowner must file a claim for the exemption with the Assessor before the improvements are completed. (NOTE: The homeowner may not claim this exemption more than once in a five-year period on the same dwelling.)
When the improvements are completed, the homeowner must submit a written notice of completion to the Assessor.
- Exemption for Physical Improvement to a Single Family Dwelling 64 0009 (Download, Fill-in)
Example of Calculation
The following example should be used only as a general guide and cannot be relied upon for any other purpose.
In 2015, a homeowner completed the addition of a family room and the renovation of the kitchen. These improvements cost the homeowner $60,000.
|Assessor determines true & fair value of dwelling prior to improvements||$150,000|
|Assessor determines true & fair value of improved dwelling||$200,000|
|Difference (value of physical improvements)||$50,000|
|30% of the unimproved dwelling ($150,000 x 30% = $45,000)||$45,000|
|Amount of Exemption: The lesser of the following two numbers -
- Difference between the value of the improved & unimproved dwelling ($50,000)
- 30% of the unimproved dwelling ($45,000)
The assessed value of the improved dwelling will be reduced by $45,000 for the next three assessment years (2016, 2017, and 2018).