Washington Property Tax Exemption for Veterans with Disabilities

RCW 84.36.381 exempts part of a primary residence from property tax for a veteran entitled to and receiving VA compensation at a combined service-connected evaluation of at least 40 percent, or at a total disability rating for a service-connected disability without regard to the evaluation percent. That second path matters: a veteran paid at the total rate through individual unemployability qualifies whatever the schedular rating. The rating floor just moved and the dates matter. Engrossed House Bill 1106 (chapter 200, Laws of 2025, approved May 7, 2025) cut the floor from 80 percent to 40 percent for taxes levied for collection in 2027 and thereafter. Taxes collected in 2026 still used 80 percent. The Code Reviser's online RCW already prints 40 percent, and the 2027 tax year turns on the veteran's rating, ownership and income in 2026, so a veteran rated 40 to 70 percent should apply with the county assessor for 2027; assessors take those claims from early 2027, once 2026 income is known, and there is no deadline. Some secondary sites describe a 60 percent step for 2026; the act has no such step. The same 2027 tax year brings Engrossed Substitute Senate Bill 6162 (chapter 163, Laws of 2026, effective June 11, 2026), which raises the income thresholds as a share of county median household income, allows a $7,500 standard deduction per applicant in place of itemized medical expenses, allows up to $6,000 of long-term rental income from the residence parcel to be deducted, and excludes Combat-Related Special Compensation from combined disposable income. A retiree with CRSC who was over the threshold before should check again. The veteran has to own and occupy the home as a primary residence in Washington. The income test is where this program differs from every other property tax exemption in this catalog, and the difference works in the veteran's favor. Eligibility turns on combined disposable income measured against a threshold, and the threshold is set per county from that county's median household income rather than by a single statewide figure. A veteran in a high-cost county therefore has a higher allowance than one in a low-cost county. What is excluded from that income is the crucial part. Veterans disability compensation and Dependency and Indemnity Compensation paid by VA are not counted in combined disposable income. Military retirement pay is counted. For a veteran whose income is mostly VA compensation, which describes most veterans at these ratings, the income test is far easier to pass than the raw numbers suggest. A veteran who assumed their VA award disqualified them should apply. How much comes off depends on both the income tier and the assessed value of the home. Where the assessed value falls below the exempt value set in the statute and income is below the corresponding level, the exemption reaches all regular and excess levies. Above that, a portion remains taxable. The county assessor works the specific numbers. Two deferral programs sit alongside the exemption, one for senior citizens and people with disabilities and one for homeowners with limited income. A deferral postpones tax rather than forgiving it, with the state placing a lien, so it is a different decision from an exemption and worth discussing with the assessor before choosing. Apply to the county assessor with a VA Benefit Summary Letter or the Department of Revenue Proof of Disability Statement.