How is property tax in Seattle calculated? 1% of purchase price?

[Jason Chung]

I was talking to a real estate agent and they said my property tax will be based on the assessed value and not the price I bought it for. I thought that my purchase price would automatically be made the assessed value when I make the purchase. Is this not true?

If so, is it ~1% of my purchase price?

[Michael Haas]

Every state is different in this respect- in WA, a assessor actually estimates the value of your property and this can change, up or down, every year. The purchase price influences that estimate, but the estimate is not set to the purchase price, and the estimate is typically less than fair market value. If you believe your estimate is incorrect, you can always contest it (which I've done in King County successfully, saving thousands of dollars a year)

As another example: in California, the tax value IS set to your purchase price, plus a modest inflation adjustment each year. For this reason, many folks who have owned their homes for 20-30 years in California have a very low tax value, and very low property taxes. This is generally seen as good for fighting against gentrification and allowing seniors to age in place, as your property taxes won't jump up dramatically just because the real estate market is appreciating.

Many here in WA, myself included, believe that some of our income inequality and gentrification problems could be solved by adopting California's model of property taxation. This would require our government to leave money on the table though, something they're not well known for doing :D.