By Dave Murnen and Pat Beaty
Is this the summer you’re planning to replace your large deck, add a room or build a garage?
If so, we have a tip that could save you some money: Call the Grays Harbor County Assessor’s Office before you start.
When we visited with County Assessor Dan Lindgren a few weeks back, he reminded us of the three-year tax exemption on the value of a remodel.
We’re all for remodeling and keeping up and improving our housing stock here, and we’re also about saving a buck when you can. That’s why this property tax exemption is definitely one we wanted to pass along to you all.
REMODELING EXEMPTION
In 1972, the Washington Legislature passed a law giving tax relief to those who embark on qualified home-improvement projects. The “Physical Improvement to a Single Family Dwelling Exemption” program may be your ticket to some savings.
This is how it works: Before beginning your remodel, but after you have secured your building permit, fill out a very simple one-page form from the Assessor’s Office in Montesano. (The timing is critical; because of the way the law is written, you must call the office before you start your project to be accepted into the program.)
The form asks you to describe the planned improvement, how much you estimate it will cost you, when you plan to begin and who issued the building permit.
You can also access information about the exemption at www.co.grays-harbor.wa.us.
PHYSICAL IMPROVEMENTS
For the purpose of this program, the term “physical improvement” means any addition, improvement, remodeling, renovation, structural correction or repairs that will add to the value or condition of an existing dwelling. It also includes the addition of or repairs to garages, carports, patios, decks, or other improvements attached to and compatible with the home.
It does not include swimming pools, small outbuildings or temporary structures.
Once you’ve been accepted into the program, the Assessor’s Office establishes the before-the-improvement value of your home. When the improvements are complete, your home is revalued.
Now here comes the good part: The difference between the values before and after the improvement is the amount exempted. This exemption is limited to 30 percent of your home’s value before the improvement.
So, for example, say you’re going to build a $60,000 addition onto your $180,000 house. Using the formula, 30 percent of $180,000 is $54,000. This would be the amount exempted, leaving $186,000 as your new assessment for three years, instead of $240,000.
Take the $54,000 exempted and multiply by a typical Grays Harbor tax rate of $14 per $1,000, and you’ll save $756 a year for the three-year life of the exemption. That’s a total of $2,268 in taxes saved for just filling out one piece of paper. (Now, let’s see, should the savings go to countertops, a new blinds or new carpet?)
So, it’s certainly worth looking into if you’re planning a remodeling project this summer. And do it soon because, again, it’s important that you get your permit and fill out the forms before you start your project.
Give the Assessor’s Office a call at 360-249-4121 for more information. They can give you an idea over the phone as to whether the project you have in mind would fit this program.
Dave Murnen and Pat Beaty are construction specialists at NeighborWorks of Grays Harbor County, where Murnen is executive director. This is a nonprofit organization committed to creating safe and affordable housing for all residents of Grays Harbor County. They can be reached at 360-533-7828.
