HB 2376
In CommitteeHouse
Property tax
Concerning property tax reform.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill expands property tax relief for seniors, disabled individuals, and veterans by raising income thresholds and increasing the amount of home value exempted, while consolidating the state property tax into a single $3.60 per $1,000 cap and requiring clearer labeling of the tax on bills. It also updates income calculations and allows exemption transfers for long-term care stays.
- Expands the senior citizen property tax relief program by raising income thresholds (e.g., for 2026, Income Threshold 1 is 50% of county median household income, rising to 60% in 2027), increasing the amount of home value exempted (e.g., up to $500,000 for lowest-income households), and allowing exemption transfer to a new home if displaced for long-term care.
- Consolidates the state property tax into a single levy capped at $3.60 per $1,000 of assessed value (down from previous layered levies), effective for 2026, and requires the state property tax to be labeled as the 'state school levy' on tax statements.
- Expands the definition of 'combined disposable income' to include more income sources (e.g., pensions, Social Security, veterans benefits) but allows deductions for health care costs, long-term care insurance, and medical equipment, with a standard deduction of $15,000 for a household.
- Clarifies eligibility for surviving spouses/domestic partners (age 57+) to continue an existing exemption, and updates rules for calculating income when retired, disabled, or experiencing income changes due to death or other life events.
- Requires tax statements to include information about property tax relief and deferral programs, and mandates that the state property tax be clearly labeled as the 'state school levy'.
Who is affected
- Senior homeowners and disabled/veteran homeowners — Seniors aged 61+ (or those disabled/retired) and qualifying veterans who own and live in their homes may receive larger property tax exemptions, with income thresholds increasing over time and exemptions expanding to cover more of their home's value.
- Surviving spouses and domestic partners — Surviving spouses or domestic partners aged 57+ who inherit an existing exemption may continue to receive property tax relief under the same program.
- General taxpayers receiving property tax statements — Low- to moderate-income households may benefit from clearer tax statements that identify the state property tax as the 'state school levy' and include information about available relief programs.
- Farmers and agricultural producers — Farmers using machinery and equipment exclusively for agricultural production may continue to be exempt from state-level property taxes on those items.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
Raising income thresholds to 60% of county median household income by 2027 and expanding the exemption cap to $500,000 for lowest-income households significantly reduces property tax liability for low- and fixed-income seniors, disabled individuals, and veterans — especially in high-appreciation areas where property taxes outpace income growth.
HousingPeopleRef: Sec. 101(5)(a) & (b)(ii) & Sec. 102(9)(d)Allowing exemption transfer when displaced for long-term care (e.g., to an adult family home) prevents seniors from losing tax relief due to unavoidable life events — protecting vulnerable populations from financial shock when forced to relocate for care.
HousingPeopleRef: Sec. 101(1)(a)-(iii) & Sec. 101(5)(b)(ii)Expanding eligibility to surviving spouses/domestic partners aged 57+ (not just 61+) preserves housing stability for widowed or divorced individuals who may have lower individual incomes but previously qualified under joint exemption rules — preventing displacement and preserving intergenerational equity.
Rights & LibertiesPeopleRef: Sec. 101(3)(b) & Sec. 101(5)(a)Expanding 'combined disposable income' to include pensions, Social Security, and veterans benefits — while allowing deductions for health care costs, long-term care insurance, and medical equipment — better reflects real-world expenses of retirees and reduces tax liability for those with high medical burdens.
HealthcarePeopleRef: Sec. 102(7)(a)-(m) & Sec. 102(13)Consolidating the state property tax into a single $3.60 per $1,000 cap (down from prior layered levies) simplifies the tax structure and may reduce administrative complexity for counties — though this benefit is offset by reduced revenue flexibility.
Local GovernmentPeopleRef: Sec. 301(6) & Sec. 301(2)(a)(i)
Potential Concerns (5)
Consolidating the state property tax into a single $3.60 per $1,000 cap reduces transparency about the source of school funding and eliminates the layered levy structure that allowed local voters to approve additional school funding — effectively centralizing control and reducing local fiscal autonomy, which may weaken community input in school funding decisions.
Local GovernmentRef: Sec. 301(1) & (4)(a)The bill reduces state property tax revenue by capping the state levy at $3.60 per $1,000 (down from prior layered levies that exceeded $4.00 in many areas) and expanding exemptions — shifting more of the burden of school funding to local levies and potentially increasing pressure on local governments to raise property taxes or cut services to compensate.
Local GovernmentRef: Sec. 301(6) & Sec. 101(5)(b)While the expanded exemption thresholds (e.g., up to $500,000 of home value exempted for lowest-income households) help low-income seniors, the $15,000 standard deduction and itemized medical deductions disproportionately benefit higher-value homeowners — since only those with substantial equity (e.g., median home value >$700K in King County) can meaningfully benefit from exemptions above $200K, and the medical deduction cap ($7,500 per person) is more useful to those with higher incomes or insurance premiums.
HousingLean peopleRef: Sec. 101(5)(b)(ii) & Sec. 102(7)(a)-(m)Allowing deductions for long-term care insurance and out-of-pocket medical costs helps some low-income seniors, but the requirement to itemize or exceed the standard deduction threshold means many seniors with modest health expenses (e.g., under $15K/year) receive no benefit — and those who do are often those with higher incomes who can afford long-term care insurance, making the benefit regressive in practice.
HealthcareLean peopleRef: Sec. 101(5)(b)(ii) & Sec. 102(7)(g)-(m)Requiring tax statements to label the state property tax as the 'state school levy' is a labeling change with no fiscal impact — it may improve transparency, but does not alter funding formulas or accountability mechanisms, and could mislead residents into thinking the state is directly responsible for local school funding when in fact the levy is a state-collected but locally allocated share of school funding.
Local GovernmentRef: Sec. 201(2)(d)
Who Is Most Affected
Low- and fixed-income seniors (especially those earning ≤60% of county median income) benefit significantly from expanded exemptions and transferability — reducing housing cost burdens and preventing displacement. However, those with higher home values or incomes may see less relative benefit.
Disabled veterans and surviving spouses (57+) gain expanded eligibility and exemption portability, improving housing security. However, surviving spouses earning just above new thresholds may lose benefits, creating a cliff effect.
Local governments (especially school districts in high-value areas) may face revenue pressure as the state levy is capped and exemptions expand — potentially requiring increased local levies or service cuts to maintain funding levels.
Farmers benefit from continued exemption of agricultural machinery and equipment from state property taxes — preserving operating capital. However, this provision was already in law and is not significantly expanded by the bill.
Moderate-income homeowners (especially those with incomes between 60–80% of county median) may benefit modestly from expanded thresholds, but those above 80% see little to no relief — creating a progressive but narrow benefit window.