In 1985, the State Legislature passed a law which allows a local option of “special valuation”, a program of real estate tax reduction for certain historic properties within the state. The purpose of this program is to encourage rehabilitation of historic properties. In 1999 Snohomish County implemented this state program and made the Special Tax Valuation available to Snohomish County historic properties. The Snohomish County Historic Preservation Commission oversees the application and recommendation for special valuation.
Under special valuation, qualified expenses for rehabilitation of a historic property are deducted form the assessed value of a property for tax purposes for up to 10 years.
To qualify for special valuation, a property must meet the following criteria
- It must be listed on the Snohomish County Register of Historic Places
- The cost of rehabilitation must total at least 25% of the assessed valuation of the structure (not including the value of the land) prior to rehabilitation
- The work must comply with the Washington State Advisory Council’s
- Standards by not adversely affecting those elements which qualify the property as historically significant.
For a complete list of standards, please call the Snohomish County Historic Preservation Commission at 425-388-3263.
To receive Special Valuation, property owners must sign an agreement with the Historic Preservation Commission that guarantees they will meet the following standards for ten years.
- Must be maintained in good condition
- Further improvements or changes to the property must be approved by the Historic Preservation Commission
- Must be visible from the right-of-way or made available to the public once a year
The penalty for violating the agreement or other program requirements is substantial. All back taxes which would have otherwise have been owed, interest on back taxes and a penalty equal to 12% of back taxes and interest may be due.
Qualified Rehabilitation Expenditures
The total cost of the rehabilitation must be equal to at least 25% of the assessed value of the property, exclusive of land value, prior to rehabilitation.
Qualified rehabilitation expenditures are expenses chargeable to the project and include improvements made to the building within its original perimeter.
- Architectural and engineering fees
- Permit and development fees
- Loan interest
- State sales tax
- Other expenses incurred during the rehabilitation period
The following are not qualified expenses
- Costs associated with acquisition of the property
- Expenditure attributable to the enlargement of the building
- Costs of valuation and permanent financing of the property
- Overhead costs or other costs of doing business
The Historic Preservation Commission determines which expenditures are qualified.