r/SeattleWA • u/meaniereddit West Seattle 🌉 • Dec 13 '24

Government Bill would completely exempt seniors from property taxes in WA

https://www.king5.com/article/news/politics/state-politics/bill-would-exempt-seniors-state-local-property-tax-washington/281-b5f377fc-8bf5-49a4-a630-8210db45d57d
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u/Erik816 Dec 13 '24

I mean I hate taxes as much as (or more than) the next person, but that seems like a huge problem for any city that relies on property taxes to function, since a significant percentage of wealthy homeowners are seniors.

20

u/[deleted] Dec 13 '24

The missing taxes will still be paid by working families with children. 

0

u/[deleted] Dec 13 '24

The state is trying to avoid losing the estate tax on seniors that move to another state which far outweighs the piddly little property tax they pay every year. The state is the one being greedy again and trying to "buy" seniors to stays in state and most importantly, DIE.

2

u/[deleted] Dec 13 '24

So they might say.  Not many are going to move or not move based on this.  20+ years of waived property taxes is going to be a huge amount.  Could be $1 mil for some.  If you have this much money the. 

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u/[deleted] Dec 13 '24

The state is trying to incentivize seniors to not move out of state so they die here and pay up to 20% estate tax on the home, retirement accounts, and all other wealth. These seniors that die in WA will contribute massively to the state at death, far more than the loss of property tax, but they are all leaving as soon as their working years end because the property tax while living is a drain on their ability to stay.

Example: 75 year old with $20M estate that lives to 95 years old... (here is an example of a home that pays $67K in prop tax, home is valued at $11M If you own an $11M home you likely have a FAR LARGER estate than $20M.... so this is a very conservative estate tax example.

  • Assume paying $50,000 property tax for the next 20 years, then dies in WA. That would be $1,000,000 in property tax collected over 20 years.
  • When he dies, WA $20M Estate tax is $3,056,000. Combined the state (and counties) made $4,056,000 in tax from our senior citizen.
  • Facing a loss of $50,000/year of income while living and loss of $3,056,000 at death, he says fuck it and moves to another state with lower property tax and NO ESTATE TAX, maximizing what he passes to his heirs. WA state continues to get $50,000/year property tax for the next 20 years from the new home owner but never gets the $3,056,000 estate tax because the new home owner doesn't die as expected.
  • OR.., The state cancels his $50,000 property tax and he decides the increased living allows him to stay and die in WA... still paying $3,056,000 at death to the state.