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News & Resources

Development Impact Tax Effective January 1

The development impact tax on residential new construction and improvement projects eligible for real estate tax abatement goes into effect on January 1, 2022. The Department of Revenue published a regulation detailing the calculation and collection of the tax. The regulation proposes that the tax be collected using:

  • Fixed values based on construction and use classification for new construction
  • 1% of total improvement costs for alterations and additions.

    The tax will apply to all relevant building permit applications received by L&I on or after January 1, 2022. For more information on the law, review Bill No. 200556, passed by Council in late 2020 and signed by the Mayor on January 27, 2021.

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