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Multifamily Property Tax Exemption Incentive

Program Purpose and Summary

The purpose of the tax incentive for multifamily housing is to encourage the development of a minimum of four new multifamily units in one of Tacoma's 17 Mixed-Use Centers.  To accomplish this goal, the City of Tacoma offers a property tax exemption to eligible property owners. This incentive exempts property taxes for eight to 12 years on the assessed improvements that create four or more additional housing units.  The latter 12-year option requires at least 20% affordable units.

 

Multifamily Property Tax Exemption (MPTE) Program Report (PDF)

Property Tax Exemption (PTE) Program Outline (PDF)

 

Application Process and Qualifying Criteria

Applications may be submitted year-round to the City of Tacoma.  An applicant must be the owner of a qualifying property located within the boundaries of a mixed-use center.

Upon City Council approval and once the project is granted a Conditional Certificate of Acceptance of Tax Exemption, the applicant has three years to complete the new housing with the tax exemption starting the calendar year following completion.

The owner enters into a contract with the City of Tacoma, establishing specific guidelines for completion and acceptance of the project. If the owner sells the property after the tax exemption has been granted, the exemption stays with the property and is transferred to the new owner.

An application fee is charged, the amount varying based on project size and number of units to be developed. If you are interested, please complete an application. Contact Debbie Bingham with questions at (253) 591-5117 or by email.  

Eight or 12-Year Exemption

The standard exemption period is eight years.  To qualify for the 12-year exemption, at least 20% of the newly created units must be affordable to renters with household incomes no greater than 80% of the area median income, or homebuyers with household incomes no greater than 115% of the area median income.  Area Median Income (AMI) is published annually by the Department of Housing and Urban Development. 

Project Location

The City of Tacoma has 17 Mixed-Use Centers that qualify for the property tax exemption.  The project must be situation within the boundaries of one of these Mixed-Use Centers which have been designated by the City Council as target areas for growth under the City's comprehensive plan.  These residential target areas are deemed to lack sufficient residential housing to meet the needs of the public.