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Tax Incentives

MultiFamily Property Tax Exemption (MFTE) Program

Multifamily Property Tax Exemption Program is one way to encourage the development of multifamily units located in designated Residential Target Areas in Tacoma. The incentive exempts qualifying projects from property taxes on the assessed improvement value for 8, 12, or 20 years based on the level of affordability provided. 


Project Eligibility:

For a project to be eligible for the tax incentive, it must:

  • Include a minimum of four new multifamily units
  • Be located in one of Tacoma’s Residential Target Areas which include:
    • 17 designated mixed-use centers
    • Areas zoned Mid-scale Residential along key corridors
  • For a 12 year exemption, 20% of the units must be affordable at 70% Pierce County AMI for 12 years
  • For a 20 year exemption, 25% of the units must be permanently affordable

On this map under layers button on the top right, check the box market “Multifamily Property Tax Exemption Eligibility Areas”.


Public DART Map (cityoftacoma.org)

Application Process:

We accept applications year-round. Applications are submitted through the permitting portal Accela.

  • There is an application fee ranging from $1,000 to $5,000 depending on project size/number of units. $1000 for the first four units and then $100 per additional unit to a maximum of $5000.
  • Applications must be submitted and approved before building permits are issued.
  • An applicant must be the owner of a qualifying property

Once the application process is complete, staff reviews the application and provides a recommendation to the Tacoma City Council to approve or reject the project based on eligibility. Upon City Council approval, 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.


If approved, the applicant has three years to compete the new housing with the tax exemption starting the calendar year following  issuance of temporary or permanent Certificate of Occupancy.


As part of our Affordable Housing Action Strategy, we have updated our program. Effective March 14, 2022, we expanded eligible areas the 12-year exemption is allowed to be used, lowered the household income level to 70% of Pierce County AMI as published by HUD each year, added a 20-year option for projects that provide permanently affordability, and adopted the option for extending an exemption for an additional 12 years if affordability is added.   


Tip Sheet: