Bill
SB 6013
Expands nonprofit housing tax exemption to cover mutual self-help programs funded by USDA, lasting until property transfers to a low-income household; requires DOR notice.
Date: Effective date 6/6/2024
Purpose and scope
- SB 6013 expands the existing homeownership development property tax exemption to cover real property owned by a nonprofit entity that enters into an agreement with another nonprofit to build, or have built, a residence on the property through a qualified mutual self-help housing program.
- The program is designed to help low-income households build or gain ownership of their residences with the labor of the households themselves (sweat equity), reducing construction costs.
- The bill is intended to align the tax exemption with mutual self-help housing models (e.g., programs similar to Habitat for Humanity) that receive USDA technical assistance funding.
Key provisions and changes
- Expanded exemption eligibility:
- In addition to the existing exemption for nonprofit low-income housing development, real property owned by a nonprofit that partners with another nonprofit to build a residence through a qualified mutual self-help housing program qualifies for the exemption.
- A “qualified mutual self-help program” must be operated by nonprofits and must receive financial support from the USDA mutual self-help housing technical assistance grant program.
- Exemption mechanics and duration:
- The exemption applies to the property for the period the property is held for the mutual self-help purpose and expires upon the transfer of title from the nonprofit to the low-income household.
- Nonprofits must notify the Department of Revenue (DOR) when the exempt real property is sold to the low-income household, including the anticipated or actual transfer date.
- The exemption can continue if the property is transferred from one nonprofit to another nonprofit or to a qualified cooperative association, provided the transferee timely applies to the DOR and is approved for continuation.
- Transfers and continuations:
- If the transfer is to a low-income household, the exemption ends at title transfer to that household.
- If the property is transferred between nonprofits or to a qualified cooperative association, the exemption can continue if the transferee secures approval for continuation.
- Extensions and penalties:
- The bill maintains existing extension provisions for seven or ten years in the original exemption framework and adds the mutual self-help program scenario.
- The “additional tax” provision (if the property fails to transfer as required) remains applicable to disqualifications, with penalties and liens consistent with current law.
- Compliance and reporting:
- Nonprofits must promptly notify the DOR of transfers to low-income households or occupancy events, as applicable.
- Appropriation and fiscal impact:
- No new appropriation is required; a fiscal note is available.
- Effective date:
- The bill takes effect 90 days after adjournment of the 2024 session, aligning with the official enactment date of 6/6/2024.
Affected stakeholders
- Nonprofit housing developers and mutual self-help programs (e.g., Habitat for Humanity-type organizations) that partner to build residences for low-income households.
- Low-income households purchasing or occupying homes built under mutual self-help arrangements.
- Washington state Department of Revenue (DOR) and local counties, which administer property tax exemptions and monitor compliance.
- Local governments and counties concerned about potential shifts in property tax revenue.
Legislative timeline highlights
- Introduced: January 5, 2024
- House Finance committee: approved (Do pass)
- Passed both chambers: February–March 2024
- Governor signed: March 26, 2024
- Effective date: 6/6/2024
Notes
- The bill builds on the existing seven-year (or ten-year with extension) exemption framework for nonprofit low-income housing development and adds mutual self-help housing as a qualifying pathway.
- Public testimony indicated broad support for expanding the exemption to include self-help programs; no formal opposition was recorded.
Compiled from official sources — confirm details with the bill’s official record.
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