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Property Tax Exemption Versus Deferral

Property Tax Exemption vs. Deferral: What’s the Difference?

If you’re behind on property taxes or worried about keeping up, you’re not alone. Falling behind on taxes can put your home at risk, but there are programs in Washington State that may help you stay in your home.
You may qualify for property tax relief through an exemption or a deferral — and while both reduce financial pressure, they work in very different ways.

Property Tax Exemption

A property tax exemption reduces the amount of property tax you owe each year.

  • It’s not a loan — you don’t have to pay it back.
  • The exemption lowers your taxable home value or eliminates certain portions of your tax bill.
  • To qualify, you must generally:
    • Own and live in your home as your primary residence.
    • Meet income limits (which vary by county).
    • Be age 61 or older, retired due to disability, or a veteran with a service-connected disability.
  • You must apply with your county assessor’s office, and once approved, the exemption is typically valid for a set period of time (often one to three years). After that, you’ll need to reapply according to your county’s guidelines to remain eligible.

Think of it as: A permanent reduction in how much you owe each year — as long as you keep your eligibility up to date.

Property Tax Deferral

A deferral postpones your property tax payments — it doesn’t erase them.

  • The state pays your taxes on your behalf, and you repay that amount later, usually when you sell your home, transfer ownership, or no longer qualify.
  • The deferred taxes become a lien on your property and accrue interest at a low rate.
  • Deferrals are typically available to:
    • Homeowners age 60 or older, retired due to disability, or meeting income limits.
  • You apply through your county assessor’s office, just like the exemption.

Think of it as: A temporary pause on your taxes to give you breathing room now, with repayment later.

Which Option Is Right for You?

  • If you’re on a fixed income and plan to stay in your home long-term, an exemption may be the best fit.
  • If you expect your financial situation to improve later (or you plan to sell your home), a deferral can provide short-term relief while preserving your eligibility for future assistance.

Our HUD-certified housing counselors can help you understand which program fits your situation — and assist you in gathering the documents you’ll need for your county application.

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Need Help Applying?

If you’re unsure which program you qualify for — or you just need help getting started — our HUD-certified housing counselors are here to help. We can walk you through eligibility, review your documentation, and connect directly with your county assessor’s office if needed.

Call (888) 864-8699 or visit our Foreclosure Assistance page to learn more about how AFS can help you protect your home and your peace of mind.