Property Tax Deferrals for Senior Citizens and Disabled Persons

The Senior Citizens and Disabled Persons Property Tax and Special Assessment Deferral Program postpones payment of your property taxes. Unlike the exemption program, this program is not a reduction of your taxes. On your behalf, the Department of Revenue pays the deferred property taxes and special assessments to Pierce County.

A special assessment is for a local improvement that directly benefits your property. Examples include assessments for sewers, lights, water, paving or curbing. Special assessments are also known as Local Improvements District (LIDs) or Utility Local Improvement Districts (ULIDs).

If your income is less than $35,000 you must apply for the Senior Citizens and Disabled Persons Property Tax Exemption Program before application is made to this deferral program.

ELIGIBILITY REQUIREMENTS

Age or Disability:

You must be at least 60 years old on December 31 of the year in which you apply, or

You must be unable to work because of a physical disability. As proof of disability, you must send a doctor's statement with your application.

Ownership:

The deferral is available for your principal home and up to five acres of land. A mobile home may qualify as your residence, even if you do not own the land where the mobile home is located.

The property must be your principal home at the time you apply for the deferral. You must occupy the home for at least six months each year.

Your residence may qualify even if you are temporarily in a hospital or nursing home. You may rent your residence to someone else during your hospital or nursing home stay, if the income is used to pay the hospital or nursing home costs.

Property used as a vacation home is not eligible for the deferral program.

You must own the property in total (fee owner) or under a contract purchase.

The lien holder or beneficiary must co-sign the application for deferral if:

The property is under mortgage, purchase contract, or a deed of trust, and
The mortgage or purchase contract requires a reserve account for the payment of taxes.

You are not eligible to defer your taxes if you have a:

Life estate
Lease for life, or
Share ownership in a cooperative housing unit.

Insurance:

You need to keep in force a fire and casualty insurance policy in an amount large enough to protect the interest of the State of Washington. The insurance policy must show the State of Washington as a loss payee. You must provide the Department of Revenue with a copy of the policy within 60 days of application.

If you do not carry a fire and casualty insurance policy, you may only defer property taxes and special assessments based on the amount of your equity in the land only.

Household Income:

Your annual household income may not exceed $40,000.

Household income includes your disposable income, that of your spouse, and any co-tenants. A co-tenant is a person living in your home who also has an ownership interest. Household income does not include:

The income of a person, other than a spouse, who does not have ownership interest and lives in your home. However, the application must show any income the person contributes to the household, or
The income of a person who has ownership interest and lives elsewhere. However, if someone living elsewhere has any ownership interest, the amount of your deferral will be based on the percentage of your interest in the property.

AMOUNT ELIGIBLE FOR DEFERRAL

The amount of equity you have in your home determines the amount of property taxes and/or special assessments eligible for deferral. Equity is the difference between the assessed value of the property and debts secured by the property. You must provide current balances for all debts that are secured by the property.

Providing you meet all qualifications and maintain adequate fire and casualty insurance, you may defer taxes and special assessments in an amount up to 80 percent of your equity. If you meet the qualifications, but do not maintain adequate insurance, you may only defer an amount equal to that of the equity you have in the land.

COMPUTING DISPOSABLE INCOME

The maximum amount of annual income you may receive to qualify for the deferral is $40,000.

The disposable income you receive during the year you apply determines your eligibility. Disposable income includes all sources, whether or not they are taxable for federal income tax purposes. Losses and depreciation may not be deducted. Some of the most common sources of income include:

Wages, salaries, and tips.
Social Security benefits.
Railroad retirement benefits.
Pension and annuity receipts, including retirement bonds, distributions from Individual Retirement Accounts, and distributions from Keogh plans. An annuity is a payment of a fixed sum of money received at regular intervals. Some examples of annuity payments include unemployment compensations, disability payments, and welfare receipts (excluding amounts received for the care of dependent children).
Interest and dividend receipts.
Business income. Depreciation and business losses may not be deducted.
Rental income. Depreciation and rental losses may not be deducted.
Capital gains.

If you were retired for two or more months during the application year, your household income will be computed by multiplying the average monthly disposable income received during the months you were retired by twelve. If your spouse died before November 1 of the application year, your household income is computed by multiplying the average monthly disposable income, after the death, by twelve

Deductions from Disposable Income: To determine your disposable income, you may take deductions for the following:

Capital gains you receive from the sale of your principal residence, if the gain is reinvested in a replacement principal residence.
Non-reimbursed amounts you pay for your spouse, yourself, or co-tenant to live in a nursing home.
Non-reimbursed amounts paid for prescription drugs for yourself, your spouse, or co-tenant.
Non-reimbursed amounts you pay for goods and services that allow you, your spouse, or co-tenant to receive in-home care. The care received must be similar to the care provided by a nursing home.
In-Home medical treatment, physical therapy, Meals on Wheels (or similar meal delivery service), and household and personal care. Personal care includes assistance with preparing meals, getting dressed, eating, taking medications, or areas of personal hygiene.
Special furniture and equipment, such as wheelchairs, hospital beds, and oxygen.

HOW TO APPLY

The Pierce County Assessor-Treasurer's office administers this program. Applications are available online or by contacting the Customer Service Hotline at (253) 798-6111 or toll-free within Washington State at (800) 992-2456 or may be picked up at the Assessor-Treasurer's office located at 2401 South 35th Street, Room 142, Tacoma WA 98409-7498. Office hours are 8:30 a.m. to 4:30 p.m.

Filing Period:

You should apply with the Assessor-Treasurer at least 30 days before payment of the property taxes and/or special assessments is due.

If you apply late, late penalties and interest will be assessed. Late penalties and interest will increase the amount of the lien filed by the State of Washington. If you are applying to stop the Assessor-Treasurer from foreclosing for unpaid taxes, you must apply within 30 days of receiving the foreclosure notice.

Annual Application:

You must apply each year you want to defer the taxes.

Signing the Application:You, your agent, or your legal guardian must sign the application. If a contract purchase agreement, deed of trust, or mortgage requires a reserve account for the payment of property taxes, the lien holder's notarized signature must also be on the application.

REPAYMENT OF DEFERRED AMOUNTS

The deferred amount and interest must be repaid when:

The property is transferred or conveyed to someone else.
You pass away, unless your spouse qualifies for the deferral and files an application with the Assessor-Treasurer within 90 days of your death.
You no longer permanently reside at the residence.
Fire and casualty insurance is not kept in an amount sufficient to protect the interest of the State and the deferred amount exceeds 100 percent of equity of the land value.
The deferred amount, plus interest, exceeds 80 percent of the equity in the insured value of the residence plus the land value.

LAWS AND RULES

Revised Code of Washington (RCW) Chapter 84.38 -- Deferral of Special Assessments and/or Property Taxes.

Washington Administrative Code (WAC) Chapter 458-18 -- Property Tax - Abatements, Credits, Deferrals and Refunds.

2401 South 35th Street Room 142
Tacoma, WA 98409
Hours: 8:30 - 4:30
Customer Service Hotline (253) 798-6111