Washington is often considered one of the nicest places to live in. There's a thriving economy and a lot of places to visit. Unfortunately, Washington is one of the most expensive states in the United States, so not everyone may be willing to invest there.
Property owners in Washington (and many other states) also have to consider other payments besides what their new home is worth, including insurance and taxes. Here, we'll talk about property taxes.
Taxes are one of the main income channels for local governments and public services, so it's essential for every Washington property owner to pay what they owe. Even though properties in this area tend to be expensive, the Washington State Constitution limits how much tax rates can increase in a given year. This makes taxes more affordable.
Below, we'll study Washington's property tax system in general. If you want to know how property taxes work in certain counties, you may want to check their respective government websites.
About Property Tax in Washington
Taxes on real estate in Washington account for approximately 30% of local tax/state revenues. As mentioned previously, your property taxes pay for local services, including parks, public schools, fire stations, etc.
In Washington, your bill depends on two factors:
- Assessed Value
- Tax Rate
You'll get your property's assessed value once a year thanks to a county assessor. These assessors will also conduct physical inspections at least once every six years.
The tax rate, on the other hand, will depend on your county's budgetary requirements, as well as the total assessed value there.
What makes Washington different from other states is that its property taxes are divided into two main categories or groups:
- Voter-approved special taxes
- Non-voter approved taxes
Voter-approved taxes are meant for particular purposes, such as funding a public project. Non-voter-approved levies, on the other hand, are meant to support operations in a particular taxing district.
When Are Property Taxes Due in Washington?
You should get your tax statement by February of each year. If you want to avoid any legal problems, you must pay at least half of your bill by April 30th. The second half would be due October 31st.
If your tax bill is less than $50, you must pay it in full by April 30th. Not paying your bills on time will often result in interest, penalties, and other severe consequences.
What Are the Consequences of Late Payments?
Your tax payment will become delinquent as soon as you miss the deadline. If your bill is three years overdue, your county treasurer may issue a "Certificate of Delinquency." This starts a foreclosure process.
Most of the time, you'll be given 30 days to respond to your foreclosure notice or pay your bill (plus extra fees/interest). If you don't pay, the court will issue an official foreclosure judgment. This means that the treasurer will be able to sell your home in a tax sale.
The goal of the sale is to pay for all the taxes, interest, and other fees you owe. If no one bids at the tax sale, your property will be assigned to the county.
Can you redeem your property? It depends. Washington State gives people three years before the tax sale to pay their delinquent bills. If they're able to do it, they can reclaim their property.
Delinquent bills include:
- Delinquent amounts
- Additional taxes, expenses, and interest that accrued
How Can You Pay Your Property Tax Bill in Washington?
Your payment method will depend on each county. According to Washington's Department of Revenue, you're supposed to pay your property taxes directly to your county treasurer's office.
Most of the time, you'll be offered the following methods:
- Online payments
- Mail payments
- Phone payments
- In-person payments
How Much Are Property Taxes in Washington?
What you'll pay for your property tax depends on your local government and voter-approved levies. In other words, you may get different tax rates depending on how much it costs to keep public services operating in your area.
Your rate on taxable property is expressed in dollars per thousand in assessed value. Once you get that number, you can use it alongside your assessed value to calculate your bill. We'll explain how that process works below.
How Is Property Tax Calculated in Washington?
There are three factors we must consider before calculating our property tax:
- Levy amount
- Levy rate
- Assessed value
The levy amount is the money needed to fund local taxing districts (or the total amount that the government must collect from a particular district).
All counties in Washington establish assessed values by January 1st. The appraisals are divided into:
- Business Personal Property
- Real Property
Once taxing districts establish the total tax levy, you can use your assessed value to calculate your rate.
Let's look at an example from Whatcom County's website. If your assessed value is $200,000, and your levy rate is 10.1823, you would have to multiply both values first.
In this case, you'd get 2,036,460. Then, you have to divide that amount by 1,000. The result would be: $2,036.46.
Keep in mind that you may get different results depending on the county. Something that also affects your bill is excess levies. These are approved by voters and are meant to cover extra issues, operations, or maintenance expenses.
Is It Possible to Lower Your Property Tax Rates?
Here's the good news for Washington real estate investors: There's a statewide limit on how much the tax levy can rise each year.
According to the Washington State Constitution, non-voter-approved rates can't rise more than 1%. Furthermore, the total tax levy in a particular taxing district can't increase by over 1% in a year. It's important to note that this cap doesn't apply to voter-approved levies, meaning that these rates could exceed that 1% increase.
Thanks to this measure, Washington's tax rates are below the national average. According to SmartAsset, the average effective tax rate in the state is 0.84%, whereas the national average is 0.99%.
What if you still want to lower your property tax rates? There may be a few options available, depending on your county.
The first option you have is to appeal your taxes. If you think that your property got appraised incorrectly, you can file a petition so that the county assessor does it again. You could get a lower property tax bill if you were right.
Unfortunately, this also can lead to your property getting an even higher assessed value, which leads to a higher bill.
If you want to make a successful appeal, we suggest you talk to a property tax expert so that they can guide you. The more proof you can gather that your property's assessed value is lower than what it shows in the report, the better.
Another popular option to keep in mind is applying for an exemption. Certain counties have exemptions that could help you lower your bills significantly.
Check with your local government to see if there are any programs you qualify for. Typically, these exemptions apply to senior citizens or people who can't work anymore due to disabilities.
Veterans may also have access to a few tax assistance programs. Those with a VA disability rating of 80% (or higher) may qualify for an exemption. Widows and widowers of veterans may also request tax assistance. Homeowners with limited income may ask for a tax deferral too.
Finally, those with a partially (or fully) destroyed property could file a "Destroyed Property" claim and get a tax reduction. This also applies if the property is in a governor-declared disaster area and got impacted, causing it to lose over 20% of its market value.
As you can see, there are plenty of options to consider, but you may not qualify for all of them. The best thing you can do is to consult with a professional to see if there are any options available.
Property taxes play a huge role in most states. They help fund many of the local services we need to live in a safe and healthy environment.
Even though property taxes in Washington have a few extra elements to consider, it shouldn't be too hard to calculate what you owe your local government every year.
One of the best ways to get help calculating your property tax bill is to look at median home values and tax rates in your county so that you can have an idea of how much you'll pay. This can also help you make a better investment decision.