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Bill

HB 1040

Concerning rental income received by people eligible for certain property tax exemption programs.

2025-2026 Regular Session Introduced by Emily Alvarado and 16 co-sponsors

HB 1040 modifies how rental income affects property tax exemption eligibility in Washington, potentially expanding or clarifying income rules for qualified property owners.

Referred to Rules 2 Review.
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WeVote Research Nonpartisan
Bill Summary · HB 1040

Legislative bill overview

HB 1040 addresses how rental income is treated for individuals who qualify for property tax exemption programs in Washington State. The bill appears to modify eligibility or tax calculation rules related to rental income received by people who benefit from certain property tax exemptions, though specific details on whether it expands, restricts, or clarifies these provisions are not fully outlined in the provided information.

Why is this important

Property tax exemptions significantly affect housing affordability and government revenue. Changes to how rental income is counted could impact whether property owners can maintain exemption status while generating income from rental units—relevant for seniors, disabled persons, veterans, and others who may rely on rental income while living on exempted properties.

Potential points of contention

  • Definition of eligible rental income: Disagreement over which types of rental arrangements (ADUs, single rooms, full units) should count against exemption eligibility
  • Revenue impact: Local governments may lose property tax revenue if exemptions expand, or individual property owners may lose exemptions if rules tighten
  • Fairness concerns: Debate over whether people receiving tax benefits should be permitted to generate rental income, or whether rental income should disqualify them from exemptions entirely

Compiled from official sources — confirm details with the bill’s official record.

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