Bill > HB1040

This bill modifies the rules for property tax exemption programs by adding a provision that allows people eligible for these programs to exclude up to $6,000 per year in rental income from their combined disposable income calculation. Specifically, the bill amends the definition of "combined disposable income" to include a new subsection that permits individuals to receive rental income from renting living space in their principal place of residence without counting the first $6,000 towards their income threshold. The bill clarifies that short-term rentals (as defined in RCW 64.37.010) are not included in this exemption and must be reported as income. This change is designed to provide additional financial flexibility for property owners who are eligible for property tax exemption programs, such as those for seniors, disabled individuals, or veterans, by allowing them to generate some rental income without impacting their tax benefits. The bill will apply to taxes levied for collection in 2027 and thereafter, and the legislature intends for this tax preference to be permanent.

Budget and Finance

https://app.leg.wa.gov/billsummary?BillNumber=1040&Year=2025&Initiative=false