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HB 1094

Providing a property tax exemption for property owned by a qualifying nonprofit organization and loaned, leased, or rented to and used by any government entity to provide character-building, benevolent, protective, or rehabilitative social services.

2025-2026 Regular Session Introduced by Brandy Donaghy and 5 co-sponsors

Washington exempts nonprofit-owned property from taxation when leased to government agencies for social services, reducing local tax revenue starting July 2025.

Effective date 7/27/2025.
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WeVote Research Nonpartisan
Bill Summary · HB 1094

Legislative bill overview

HB 1094 creates a property tax exemption for real estate owned by qualifying nonprofit organizations that is loaned, leased, or rented to government entities for providing social services like character-building programs, benevolent aid, protective services, or rehabilitation efforts. The exemption applies to the property used for these government-provided services, effectively removing that property from local property tax rolls. The bill was signed into law on April 7, 2025, and becomes effective July 27, 2025.

Why is this important

This legislation affects local government revenue, as properties that would normally generate property tax income are exempted when used for government social service delivery. It incentivizes nonprofits to partner with government entities by making their properties more valuable (tax-free) when leased to public agencies, potentially increasing availability of facilities for public services. However, the revenue loss is borne by local school districts, counties, and municipalities that depend on property tax bases.

Potential points of contention

  • Revenue impact on local services: Cities, counties, and schools lose property tax revenue that funds basic services, potentially requiring budget cuts or tax increases elsewhere
  • Definition ambiguity: Terms like "character-building," "benevolent," and "rehabilitative" are broad and could lead to disputes over which nonprofit properties qualify for exemption
  • Equity concerns: The exemption benefits nonprofits with property assets while potentially disadvantaging those without real estate, and exempted properties reduce the tax burden on remaining property owners

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

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