Purchasing and owning a home is an adventure, and being prepared for the obstacles you’ll be facing can help you head them off without losing more of your sanity than is necessary. After dealing with banks, agents, sellers, competitors, and everyone else at the negotiating table, you might have forgotten that your property will be subjected to local taxes based on its value. Whether you’re seeking to buy a home or recently purchased one, check out the Movoto primer to understanding the Seattle property tax code.
What Are the Basics I Should Know?
Like property taxes in any other city or state, the funds generated through the property tax are used to fund important local services that enrich the neighborhood. This creates a cycle of improvements in the surrounding area in the form of a more desirous place to live which leads to a higher demand for the land and property in the area which drives up the revenues generated by the property tax which takes the merry-go-round of economic growth back to the beginning. The county government is the usual enforcer and collector of property taxes, but the overarching guidelines are given in the state’s constitution. The collecting body for Seattle is King County.
The overall property tax rate is limited by a capped. pre-approved amount which can only be surpassed by a local vote. The total value of the voter-approved levies stands at over $220 million in collections every year. The first and most immediate concern for most homeowners is how much they can expect to pay on their annual property tax. In 2014, the median amount paid by homeowners was $4,022. This number comes from the median assessed value of properties in all of King County, the exact method depending on the type of property it is. For residential properties, the value is determined by the sale price of homes in a similar location with previously aligned assessed values. To appeal the assessed value of your property, you can call the King County Assessor’s office or file an eAppeal on their website.
If you expect to be unable to pay your property taxes for any reason, make the effort to reach out to the King County Assessor’s office and ask them about any available payment plans or other options that could take some of the pain out of the bill. There will be a limit to how much they can work around you, so call or stop by the office as soon as you expect trouble to give them the best chance to help you. Left unattended, a delinquent property tax payment can result in progressive fees until the county Sheriff has permission to sell the home in order to recuperate the missing funds from the budget.
What Does the Future Hold?
2016 will see continued increase in the property tax rates. In November of 2015, the voters of Seattle approved increases in the property tax aimed at funding public transit, support for children, and the fight for campaign finance reform. This includes the largest levy in the county’s history: the nearly $1 billion Move Seattle project. Seattle natives aren’t shy about approving new measures to support the community, so don’t expect the trend to shift away from upwards anytime soon without a major change in the real estate market.
What Tax Relief Options Are Available?
For a full list of all the available tax relief options, visit the King County website. For those who are over sixty years of age or have a diagnosed disability, earning less than $40,000 in annual income may qualify you for a property tax deferral program. If you have a deceased spouse who previously qualified for the benefits and you were 57 or older at the time of their passing, you can submit an application for review; This serves as a protective measure against the loss of a home in the event of an already troubling time for a younger spouse.
Limited assistance is available for homeowners experiencing financial hardship without extenuating circumstances once they have owned the home for five years.
For people in the market for a fixer-upper, be sure to take advantage of a home improvement deferral before the construction is completed to maximize the benefit you’ll see in savings or resale pricing.
How Does Seattle Compare to Other Areas?
According to a 2015 report by Kelly Shea of the Seattle Times, the Emerald City ranks sixth out of the 50 largest metropolitan areas in the United States. The good news is that same report highlights how Seattle has had the lowest percentage increase amongst the cities with the highest median payments, so you’ll see less of a jump in your property tax payments than those who will be purchasing homes in New York City, Austin, or San Jose. The comparison to NYC can be particularly skewed thanks to the class division system it uses. Class 1 properties, or homes for three or fewer families, see a tax rate of almost $20 per $1,000 in assessed value. You will undeniably tend to pay more every year than you would in other portions of Washington state, but the higher median assessed values are the most culpable instigator of the disparity.
Any Final Thoughts?
To get a quick guidepost to how much you can expect your property tax bill to be, just take the sale price of the property, ignore the decimals, and cut off the two digits furthest to the right (the ones and tens). From there, it may venture up or down based on modifiers like exemptions, deferrals, or the final calculations of the assessor’s office.
The Washington state property tax has one of the more complicated underlying rule sets of codes throughout the nation, so don’t be afraid to look for additional information online or from your real estate agent.
2 Point Highlight
King County property taxes are the highest in the state, but they are fair in comparison to nation-wide metropolitan areas.
The median amount of property taxes paid by Seattle property owners was $4,022 in 2014.
