The Multifamily Property Tax Exemption (MFTE) Program provides a tax exemption on the residential improvements on multifamily projects in exchange for setting aside 20% of the units for moderate-wage workers. Projects must be located in a residential targeted area and applications must be submitted prior to the issuance of a project's first building permit. See details below.
Please contact Mike Kent at (206) 684-0262 for more information about the program.
- Encourage the development of multifamily housing opportunities within the city of Seattle.
- Stimulate the construction of new multifamily buildings, and the rehabilitation of vacant or underutilized buildings.
- Increase the supply of housing opportunities for moderate-wage workers.
- Assist in accomplishing the planning goals required under the Growth Management Act, by increasing the supply of multifamily housing opportunities in urban growth centers.
- Contribute neighborhood development and community revitalization.
- Preserve and protect buildings of historic and cultural significance.
- Encourage the creation of both rental and homeownership housing for moderate wage workers.
- Encourage the development of mixed-income housing.
Tax exemption benefits
- The tax exemption is available for residential improvements.
- Land and any non-residential component of the project (retail, commercial, office space, etc.) are not eligible for the exemption and will be taxed on full assessed value.
- The property tax exemption will remain in place for a maximum of 12 years, provided the property remains in compliance with the rules of the program.
- The tax exemption is transferable to a new property owner as long as the new owner continues to meet the compliance requirements.
Eligibility criteria and map of target areas
- The development site must be located within the boundaries of one
of 39 Multifamily Property Tax Exemption Program target areas (pdf format).
- The development must be a residential or mixed-use project with a minimum of 50% of the gross floor area for permanent residential use.
- New construction projects must have a minimum of 4 housing units.
- Rehabilitation or conversion projects must include the addition of at least 4 new housing units.
- Rehabilitation or conversion of existing buildings:
For vacant buildings, the residential portion shall have been vacant for at least 12 months prior to application.
- For occupied buildings, there shall be no displacement as defined in SMC Chapter 22.210.030.
Affordability requirements: (See current income and rent limits below)
For rental projects; the tax exemption is available for all units, and
A minimum of 20% of the units must be rented to households with incomes:
- At or below 65% of median for studio units
- At or below 75% of median for 1-bedroom units
- At or below 85% of median for 2-bedroom and larger units
For homeownership projects; the tax exemption is available only for those units occupied by income-eligible households.
The units must be sold to households with income at time of purchase that do not exceed:
- 100% of median income for studio and 1-bedroom units
- 120% of median income for 2-bedroom and larger units
Current income and rent limits table
Code compliance and design review
- All applicable zoning, land use, and building codes must be complied with during construction and throughout the duration of the tax exemption period.
- If applicable, Special Review District, Landmark Preservation or Historic District certificates of approval or permits must be obtained.
Applications must be submitted to Seattle's Office of Housing prior to the issuance of a project's first building permit.
- SMC 5.73: Multifamily Housing Property Tax Exemption Program
RULES AND OTHER PUBLICATIONS