State tax-credit program helps owners who rehab historic homes
Olympia attorney Robert Millar discovered he could lower his property taxes through a special statewide tax-credit program by improving...
Olympia attorney Robert Millar discovered he could lower his property taxes through a special statewide tax-credit program by improving his historic 1927 Craftsman home in Olympia's South Capitol neighborhood.
As a transplant from the Washington, D.C., area, Miller said he was aware of tax-incentive programs back East that encouraged homeowners to preserve a property's historical look and status.
When he and his partner moved to Washington state in January 2005, he asked his real-estate agent about similar programs.
His agent referred him to the state, where he learned about the "Special Valuation Tax Incentive Program," which lets homeowners apply to have a portion of their renovation costs deducted from their home's assessed value.
A home's assessed value is the basis used for calculating property taxes, so deducting from that value lowers property taxes.
The program, available statewide, is administered by counties via their assessors' offices.
Millar said that to be eligible, he would have to spend at least 25 percent of his home's assessed value on renovations.
He would also have to complete renovation work within a two-year period.
His home was assessed at about $300,000 he said, so his $120,000 investment to renovate kitchens, bathrooms, old lathe-and-plaster wall surfaces, millwork, floors, landscaping and other features went well above this minimum.
When his work was complete, local inspectors reviewed the work and determined he could deduct $70,000 from his home's assessed value, starting with the next time the assessor calculates his home's value.
Millar's property is assessed for 2007 at $11.18 per $1,000 of property value, according to the Thurston County Assessor's Office.
When Millar pays property taxes in 2007 he will pay $782 less than the regular rate because he pursued the special tax exemption.
Tax-levy rates vary from one year to the next, but if levies held steady at 2007 levels, Millar would save close to $8,000 in property taxes over 10 years.
Millar said the county assessor's office will subtract the $70,000 figure the next time it computes a value for his home; he can then begin paying reduced property taxes via his lender.
The program remains in place for 10 years and it is transferable if Millar sells his property.
— Jane Hodges