2026 tax preference review: Housing for People with Developmental Disabilities
July 2026
Francisco Santamarina; research analyst
Pete van Moorsel, tax review coordinator; Eric Thomas, legislative auditor
Contact information
Legislative auditor's conclusion
The preference is unused. As such, it has not met the Legislature's goal to increase housing opportunities for adults with developmental disabilities.
Read the full reportKey points
- About 16,600 adults with developmental disabilities live at home with parents or family members.
- Parents and guardians can transfer their home to a qualified nonprofit so that their adult dependent can continue living in the home.
- With the preference, the parent or guardian does not pay real estate excise tax when making the transfer. The tax savings are based on the home's value.
- The preference specifies which nonprofits qualify, limits the number of units per home, and does not let parents put other conditions on the transfer. These restrictions may pose barriers to its use.
- Stakeholders report that the need for housing remains.
Legislative auditor’s recommendations
State law requires the legislative auditor to recommend legislative action for each tax preference.
The legislative auditor makes one recommendation.
Recommendation #1
The Legislature should allow the preference to expire because it has not increased housing as intended.
The Legislature stated that it would extend the preference if it led to an increase in residential property transfers. The preference has not been used, so it does not meet the threshold for extension.
Considerations
The 2018 Legislature aimed to encourage parents to transfer property so their adult dependents with developmental disabilities could remain in their homes. If that continues to be a legislative priority, the Legislature should work with DSHS to identify strategies to achieve that objective.
The preference is unused and there are no savings. There are no effects on state revenue.
Not applicable.
Responses from the Office of Financial Management (OFM) and the Department of Revenue (DOR) will be included with the proposed final report.
Video summary
Read the full report
Housing for People with Developmental Disabilities (HTML)
Read an overview
Read the agency response
To be included in proposed final report
Legislative mandate