Editor’s note: This is part 10 of a series that explores the housing crisis affecting Port Townsend and Jefferson County

Jefferson County seniors and disabled homeowners will save about $2.6 million on 2025 property tax bills through Washington’s Senior Citizen and Disabled Persons Property Tax Exemption Program, a benefit that Jefferson County Assessor Jeff Chapman says comes at a cost. 

The program works by freezing the taxable value of qualifying homes and reducing or eliminating local property taxes, helping older adults and residents with disabilities remain in their homes amid rising property value and tax rate increases. 

That tax relief, however, does not reduce the amount that local governments collect. Instead, the tax burden shifts to other property owners, resulting from a $269 million reduction in taxable property value this year, which is up about 75% since 2015, pushing levy rates higher countywide.

“To the recipient, it’s a true tax exemption,” Chapman said. “But in effect, it is a shift — the more property owners on the exemption, the higher the rate for everyone else.”

Steady enrollment, growing values

About 1,100 households in Jefferson County currently qualify for the program, a number that has remained fairly steady over the past decade. However, the total value of exempted property has grown with rising home values. 

According to Department of Revenue records, in 2015, the total assessed value exempted was approximately $153 million. By 2024, that number climbed to $265 million.

Chapman explained that the program is crucial for older residents trying to stay in their homes while on fixed incomes. However, as property values rise, the total savings have also increased, leaving their Jefferson County neighbors to foot the bill. 

Who saves and who pays

Those enrolled in the program do not pay voter-approved “excess levies,” including school and bond measures. For regular levies, participants’ taxable value is capped at the market value from the year they first qualified, often referred to as a ”frozen value.” Low-income participants receive the most significant tax breaks, sometimes paying little to no property taxes.

The savings for participants are typically offset by added costs to other property owners. Since taxing districts still collect the same tax dollars, those higher levy rates are applied to anyone outside of the program, including young homeowners, first-time buyers, landlords, owners of second homes and small businesses.

In practice, a Port Townsend homeowner with a $500,000 assessment may end up paying more due to the shift. At the same time, a qualifying senior with a similar home value is likely to save thousands of dollars under the exemption program. 

“It effectively raises the tax burden for those that aren’t receiving the exemption,” Chapman said. “That could be younger property owners and first-time property purchasers.”

Heavier in Jefferson County

The effect is felt much more in Jefferson County than in larger counties, such as King or Snohomish, Chapman said. With a limited number of taxable parcels available, the tax burden is spread further across a smaller population of property owners.

“In smaller counties like ours, where there isn’t a large pool of taxable property, these shifts are felt more directly,” he said.

Threshold change looming

Eligibility is based on income. The current limit is $45,000, a number tied to the county’s median household income, calculated by the Washington State Office of Financial Management.

That threshold is reassessed every three years, and Chapman said the number is expected to rise to about $60,000 after review in 2026. He said by raising the threshold, more households will enter the program, adding relief to seniors while extending the tax shift to others. 

“As more people qualify, the savings for participants go up — but so does the portion redistributed to everyone else,” Chapman said.

Weighing options

Some Washington assessors have discussed creating a Homestead Exemption that could provide tax relief to primary residences. The approach would help spread benefits more widely, but it would shift added costs to non-primary homes, vacant lands and commercial properties.

“Homestead Exemptions are popular in many states,” Chapman said. “If applied to the state school levies only, the shift would happen statewide, which would alleviate the pressure on taxpayers in smaller counties.”

However, Chapman said that efforts to advance the exemption face significant administrative hurdles in Olympia. For the program to work, the state would require a system to verify which properties are primary residences, a hurdle Chapman said does not exist and would be expensive to implement. 

As it stands, Jefferson County’s exemption program provides tax relief for low-income seniors, allowing many to stay in their homes despite rising home values. But with every dollar of relief comes a cost, and it is growing.  

Alex Frick is a Report for America corps member who writes about rural peninsula communities. Please consider a tax-deductible gift of any amount to help cover his work for The Leader by visiting www.ptleader.com/donation-portal-preview/index.html