Significant Tax Savings for Haystack Heights

Property Tax Exemption Explained
By Doug Robnett
 
I wanted to take the opportunity to try and make as simple as possible the City of Spokane’s Multiple Family Tax Exemption (MFTE) as it applies to Haystack Heights. What follows is my best understanding of how the exemption applies to our project. Please keep in mind that these things can get tricky and I am not a tax lawyer or a city planner – that is my disclaimer.

The area we are building our homes in is designated a Multiple Family Tax Exemption (MFTE) zone. What this means is that new construction of dwellings with four or more units are exempt from city taxes for eight years. As such, this exemption will apply only to newly constructed homes and not the existing spaces in the Haystack Building. The exemption is based on the assessed value of the “housing portion of the property.” The city has told us that the home value includes the shared value of the common house. This means the exemption will be on the assessed value of the home. It will not apply to the land value.
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The calculation is pretty simple: for every $120,000 of assessed value there is a $1,600 tax savings. This exemption has a life span of 8 years. So, if your home is assessed at $360,000 (round number for ease of calculation) then you tax savings will be $4,800 per year. Over an eight-year period, your savings on property tax would be $38,400.
            If you would like more information please check out the city’s web site page on the MFTE.