Will a Kitchen Remodel Raise Your Property Taxes in Washington?

It can. Property tax follows assessed value, and a remodel that makes a house worth more can be reflected in that value. Washington softens the effect with a three-year exemption for home improvements, which Clark County calls the Homeowner's Remodel Exemption. It is easy to miss, because it has to be applied for before the work is finished. This page explains what it does and how to claim it. It is general information, not tax advice.

How a remodel affects assessed value

The exemption exists because improvements can add to a home's taxable value. Washington's rule (WAC 458-16-080) describes a "physical improvement" as "any addition, improvement, remodel, renovation, or structural enhancement that materially adds to the value of an existing single family dwelling." A full kitchen remodel is the kind of work that can do that.

How much value a particular kitchen adds, and when it shows up in your assessment, is a judgment the Clark County Assessor makes for your property. If you want to know how your project would be treated, ask the Assessor's Office directly. It is not something a contractor can tell you.

The three-year home improvement exemption

RCW 84.36.400 provides that any physical improvement to a single-family dwelling "shall be exempt from taxation for the three assessment years subsequent to the completion of the improvement to the extent that the improvement represents 30 percent or less of the value of the original structure."

In plain terms: for three assessment years after the remodel is complete, the value the remodel added is left out of the taxable value, up to a cap. After that, the full value is taxed. It is a delay, not a permanent reduction.

How the amount is calculated

The state rule sets the exemption as "the difference between the true and fair value of the dwelling before and after the physical improvement," and says it "cannot exceed thirty percent of the true and fair value of the dwelling prior to the improvements." Two points follow:

• It is based on added value, not on what the project cost.
• The cap is measured against the value of the dwelling before the work.

What qualifies and what does not

For a kitchen, the practical distinction is between a remodel and a repair. Replacing a failed faucet or repainting cabinets is maintenance. Rebuilding the kitchen with new cabinetry, surfaces, wiring and layout is an improvement. Older versions of the county and state forms quote wording that includes repairs, but the current state rule excludes them, so treat pure repairs as excluded.

When to apply: before the work starts

The official sources do not agree on the deadline, so take the earlier one.

The safe course is to apply before work starts, and in any case before it is completed. Filing before demolition satisfies every version of the rule. An application made after the kitchen is finished is too late under all three.

How to apply in Clark County

1. Get the form. The county's "Application for Exemption for Physical Improvement to a Single Family Dwelling" is on the Assessor's Homeowner's Remodel Exemption page. The state version is Department of Revenue form REV 64 0009.
2. Fill it in before work begins. You will need a detailed description of the improvement and the building permit number associated with it.
3. Send it to the Assessor and keep a copy with your project records.
4. Notify the Assessor in writing when the work is complete. The Assessor then finalizes the application.

The permit number question

The county asks for a building permit number. Many kitchen remodels do have a building permit, but some kitchen work in Vancouver is exempt from one. Whether a kitchen remodel that needs no building permit can still qualify in Clark County is something this guide could not confirm. If your project falls in that group, ask the Assessor's Office before you start. The page on whether you need a permit explains which work is exempt, and the City of Vancouver permit process shows where the permit number comes from.

Other limits to know

• Once in five years. The exemption "cannot be claimed more than once in a five-year period."
• Three assessment years. After that the added value is taxed in full.
• Single-family dwellings only. The state rule defines this as an independent, free-standing structure with one dwelling unit and a permanent foundation.

Where this fits in your planning

The exemption does not change what a kitchen costs to build. It changes what the finished kitchen costs to own for the first three years. That makes it worth a short form, but it is not a reason to choose one design over another.

For the cost of the remodel itself, see JDI Construction's planning ranges on the kitchen remodel cost page. For the tax that applies to the contract, see sales tax on a kitchen remodel. For what a kitchen tends to return at resale, which is a different question from assessed value, see kitchen remodel ROI. Incentives that have ended or not yet opened are covered under rebates and tax credits.

JDI Construction handles permits for its clients, so if we are doing the work, ask us for the permit number the county's form requires. The application itself is the homeowner's to file with the Assessor. To talk through a project, see kitchen remodeling in Vancouver.