SENIOR/DISABLED PROPERTY TAX DEFERRALS

If you are a senior citizen over the age of 60 or a disabled person unable to work, you could be eligible for the Senior/Disabled Persons Property Tax Deferral. Under this program the Washington State Department of Revenue pays the property taxes and/or special assessments on your behalf. (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 Improvement Districts (LIDs) or Utility Local Improvement Districts (ULIDs).) The deferred amount, plus interest, becomes a lien in favor of the state until the total amount is repaid.

Eligibility Requirements
Age or Disability

You must be at least 60 years old or must be unable to work because of a disability prior to the year of your application. For example, if you turned 60 or were physically disabled in 2006 your application year would be 2007. (Proof of disability is required.)

Ownership Requirements

The deferral is available for your primary residence and up to one acre of land that your residence sits upon. If local zoning and land use regulations require more than one acre of land per residence in the area where you live, you may be eligible for a property tax deferral on up to five acres of land. You must reside at least six months each year on the property and the property must be your primary residence in the year prior to when the taxes are due. 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. An irrevocable trust may qualify.

You are NOT eligible to defer your taxes if you have a life estate or lease for life, a share ownership in a cooperative housing unit, or a revocable trust.

A mobile home may qualify as your residence regardless of whether or not you own the land it sits on.

Your property will still be considered your primary residence if you are temporarily residing in a hospital, nursing home, boarding home, or adult family home. You may also rent your residence during your hospital or nursing home stay if the rental income is used to pay hospital or nursing home costs. Assisted living facilities are not considered nursing homes.

Calculating Annual Income

To qualify for an deferral your annual income cannot exceed $40,000. Proof of income is required in the form of a federal income tax return and all year-end statements. All sources are to be included, whether they are taxable for federal income tax purposes or not.

Most common sources of income include, but are not limited to:

		Wages, Salaries, and Tips
		Interest and Dividends
		Social Security Benefits
		Business and Rental Income
		Railroad Retirement Benefits
		Capital Gains
		Pensions and Annuities
		IRA Withdrawals

Loss and depreciation from business and rental income may not be deducted and must be added back into your total income.

Pensions and annuities may include retirement bonds, individual retirement accounts, IRA’s, and distributions from Keogh plans.

An annuity is a payment of a fixed sum of money received at regular intervals. Examples of annuity payments include unemployment compensation, disability payments, and welfare payments (excluding income received for the care of dependent children).

If you were retired for two or more months during the application year, your annual household income will be calculated by multiplying your average monthly income after your retirement by 12 months.

Deductions Allowed on Annual Income:

The following may be deducted from your total income:

		Any capital gain from the sale of your “primary residence” that is reinvested in the purchase of your “new primary residence”. (Proof of your reinvestment is required.)
		Nursing home costs for yourself, your spouse, or your co-tenant that are not reimbursed by insurance. (Proof of these costs is required.)
		Prescription drugs for yourself, your spouse, or your co-tenant that are not reimbursed by insurance. (Proof of payment is required.)
		Insurance premiums for Medicare under Title XVIII of the Social Security Act.
		In-home health care costs for yourself, your spouse, or your co-tenant that are not reimbursed by insurance. (Proof of these costs is required.)

In home health care is defined as medical treatment or care received in the home such as special needs furniture, oxygen, meals-on-wheels, attendant care, and light housekeeping tasks that are part of the necessary and appropriate treatment.

Payments for in-home health care must be reasonable and comparable to payment of similar services in your area. The persons providing the care or treatment need not be licensed. Proof of any deductible expense must be submitted with your application.

Insurance Coverage

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 Washington State Department of Revenue listed 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 that includes dwelling coverage and lists the Washington State Department of Revenue as a loss payee on the policy, your deferral will be limited to the amount of equity in the land only.

How To Apply

The Assessor is the administrator of this program and is responsible for determining if you meet all qualifications.

Applications should be submitted at least 30 days before payment of the property taxes and/or special assessments are due. This helps to avoid late payment penalties and interest due to nonpayment of your property tax.

If you are applying to stop the county treasurer from foreclosing for unpaid taxes, you must apply within 30 days of receiving the foreclosure notice. If you have unpaid taxes or special assessments from prior years you may request payment for the prior years on the same application form. You do not need to submit a separate application for each year.

You, your agent, or your legal guardian must sign the application. Any others who have an ownership interest in the property should also sign the application.

The lien holder’s or beneficiary’s notarized signature must be on the application if ALL three of the following apply:

Annual Application

The deferral is not automatic and you must file a renewal application each year you want to defer your taxes and/or special assessments.

If you are deferring special assessments, you must choose the installment payment method if it is available.

Repaying the Deferral

The deferred amount and interest must be repaid when one of the following occurs:

		Property is transferred or conveyed to someone else.
		Death, unless your surviving spouse is at least 57 years old, meets the qualifications for the deferral, and files an application with the Assessor within 90 days of your death.
		You no longer permanently reside at the residence.
		Condemnation of the property by a public or private body exercising eminent domain power.
		Fire and casualty insurance listing the Washington State Department of Revenue as a loss payee is not kept up to date in an amount sufficient to protect the interest of the state, and the deferred amount exceeds 100% of the equity in the land value.

The annual rate of interest on deferrals paid by the State of Washington on or after January 1, 2007 is 5%. The annual interest rate on deferrals paid before January 1, 2007 is 8%.

The Grays Harbor County Assessor’s Office must notify you if your application is denied. You may appeal your denial to the Grays Harbor County Board of Equalization within 30 days of the date your denial was mailed.