Retirees in the state of Washington can take advantage of spectacular scenery, abundant outdoor recreational opportunities, arts and culture. The state has two quite different climates. The area east of the Cascade Mountains is characterized by hot summers, cold winters and little rainfall. On the west side of the Cascades, temperatures are mild, and the coastal area is one of the rainiest regions in the country.
As indicated by Top Retirements, the cost of living is considerably higher in Seattle than in other areas of Washington. But Washington does not have a state income tax and the overall tax burden is relatively low, ranking 35th among the U.S. states.
According to the Tax Foundation, property taxes in Washington ranked 25th in the country in 2008 in terms of property taxes paid as a percentage of median home value, at 0.84%. Property taxes on residential property are assessed at 100% of the true and fair market value. Property tax rates are expressed in dollars per thousand dollars of property value and are assessed by the local governments. To find the local tax levy rates you can follow the links to the County Assessor and Treasurer Websites on the Washington State Department of Revenue website.
Senior citizens and disabled persons can quality for a property tax exemption that freezes the value of the residence, exempts all excess levies and may exempt a portion of the regular levies. This exemption is available for your primary residence and up to one acre of land or up to five acres if local zoning regulations require more than one acre per residence. To be eligible for this exemption you must be at least 61 years of age, unable to work because of a disability, or a veteran with a 100% service connected disability. Your annual household disposable income cannot be more than $35,000.
Senior citizens at least 60 years old and persons retired due to disability could also qualify for a property tax deferral on up to 80% of the equity in their home. The deferred taxes constitute a lien on the home and are paid when the home is sold, the applicant passes away, or the home is no longer used as the primary residence. The annual household income limit for the property tax deferral program is $40,000.
If you make an improvement to your home in Washington, such as adding a room, a deck or patio, you can apply for a three-year exemption from property taxes on the value of the improvement.
Sales and excise taxes in Washington
The state sales tax rate in Washington is 6.5% and local sales taxes can increase the overall rate up to 9.5%. Prescription drugs, hearing aids, and certain groceries are exempt from sales tax. There is an additional tax of 0.3% on retail sales, leases and transfers of motor vehicles.
The annual registration fee for a passenger vehicle depends on the weight and ranges from $43.75 for a vehicle up to 4,000 lbs. up to $63.75 for a vehicle that weighs from 6,001 to 8,000 lbs. The annual registration fee for a motorcycle is $43.75. A motor home is charged an annual fee of $111.75 and a travel trailer $36.75. Boats are charged an annual fee of 20.25 and boat trailers from $21.75 to $36.75 depending on the weight.
Washington has an estate tax that is not affected by the federal estate tax. The filing threshold is a gross or taxable estate plus any taxable gifts for a total of $2,000,000 or more. Estate tax rates range from 10% on a Washington taxable estate of up to $1,000,000 up to 19% on a taxable estate of $9,000,000 or more.
County Assessor and Treasurer Websites – Washington State Department of Revenue
Estate Tax – Washington State Department of Revenue
Fees – Washington State Department of Licensing
Local Sales and Use Tax Rates – Washington Department of Revenue
Property Tax Exemptions and Deferrals – Washington State Department of Revenue
Property Taxes on Owner-Occupied Housing by State, 2004 – 2008 – Tax Foundation
Washington state retirement communities – Top Retirements