The Real Cost of Owning Property in Anacortes, WA

Washington Has No State Income Tax -- But That Is Not the Whole Picture

The single biggest structural difference a buyer moving to Anacortes from almost any other state needs to understand is that Washington levies no state income tax at all, on wages, retirement income, or investment income. For a retiree living off Social Security, a pension, and a taxable brokerage account, or a remote worker with a six-figure salary, that is a real, meaningful, ongoing savings compared to a state like Oregon or California, and it is one of the most consistently cited reasons people relocate to Washington's coastal and island communities specifically.

What replaces that lost income-tax revenue, from the state's perspective, is a real sales tax and a real property tax, and neither should be assumed away just because there's no income tax line on an April return. Washington's base state sales tax is 6.5%, and local jurisdictions add their own increments on top of it; most Skagit County communities land in the roughly 8.5% to 8.9% combined range, though this page did not confirm Anacortes' own precise current combined rate this research pass and recommends checking the Washington Department of Revenue's published rate lookup for the current figure before budgeting a major purchase like a boat, a vehicle, or a home renovation.

Property Tax: A Genuinely Different System From Oregon or California

Washington's property tax system does not work like Oregon's or California's, and a buyer should not assume either state's rules transfer. Since voters passed Initiative 747 in 2001, Washington law generally caps the year-over-year growth of a taxing district's total property tax levy (not an individual bill) at 1%, before accounting for new construction added to the tax rolls -- a real, statutory ceiling on how fast total collections can grow, distinct from a cap on any one homeowner's assessed value or bill. Properties are assessed at 100% of market value by the county assessor and are meant to be kept current with the market, meaning a property's assessed value -- and therefore its tax bill -- can and does move with local market conditions in a way a capped-assessment state like California's Prop 13 system does not allow.

For 2025, the City of Anacortes' own portion of the property tax rate sits at $1.34 per $1,000 of assessed value -- described by the city as the second-lowest municipal rate of any city or town in Skagit County -- and represents roughly 15% of a typical combined property tax bill, with the remainder going to Skagit County, the local school district's maintenance-and-operations and bond levies, the state school levy, the library district, the port district, and other overlapping taxing jurisdictions. A commonly cited effective combined rate across Skagit County for the 2025 levy year runs around $10.00 per $1,000 of assessed value (roughly 1.0%), though this figure varies by exact taxing-district overlap for a specific parcel and should not be treated as Anacortes' own guaranteed rate. This page treats that $10.00 figure as directional context, not a confirmed Anacortes-specific combined bill.

A Real Example of How the Numbers Move

The Anacortes City Council approved a 1% increase to its 2026 property tax levy, the maximum annual increase state law generally allows, adding an estimated $85,646 in city revenue plus roughly $55,000 attributable to new construction added to the tax rolls, bringing total city collections to about $8.7 million. On an average Anacortes home with an assessed value around $750,000, that translated to roughly $10 more in city taxes for 2026, for a total average city-portion bill of about $984 for the year -- a small, real, concrete illustration of how the 1% cap actually plays out on an individual bill, and a useful sanity check against a listing sheet's stale estimated-taxes line, which can lag behind a recent reassessment.

That $984 figure is the city's slice alone -- roughly 15% of the total bill on the city's own accounting -- meaning the full combined property tax bill for that same $750,000 home, once county, school, and other district levies are added, runs meaningfully higher. A buyer should ask a seller's agent or the Skagit County Assessor's Office for the actual, current, full combined tax bill on a specific parcel rather than extrapolating from the city rate alone.

Insurance: No Hurricane Pool, But Earthquake Coverage Is a Real Line Item

Unlike nearly every other coastal market on this site, Anacortes carries no wind-and-hail insurer-of-last-resort program, because Puget Sound simply does not see hurricanes or tropical storms -- there is no Washington equivalent of North Carolina's Beach Plan or Florida's Citizens. What a Washington coastal buyer does need to budget for is earthquake insurance, which is sold as a separate policy from standard homeowners coverage almost everywhere in the state, given the region's real Cascadia Subduction Zone exposure covered in depth on this site's Hurricane & Storm Risk and Flood Zones pages. This page did not confirm a current Anacortes-specific earthquake-insurance premium range or takeup rate this research pass, and declines to invent one; get an actual quote from a Washington-licensed broker rather than assuming a generic national figure applies here.

Flood insurance through the National Flood Insurance Program is a separate, real cost consideration for any parcel in Anacortes' mapped flood zones, which concentrate around the Fidalgo Bay lowlands and the tidal areas near the Highway 20 bridge approach rather than spreading across the whole town -- see this site's Coastal Insurance and Flood Zones pages for the fuller detail on both of these separate policies.

Ferry-Adjacent Costs a Beach-Town Buyer Might Not Expect

Anacortes itself is not ferry-dependent -- it is the bridge-connected mainland town that hosts the ferry terminal serving the San Juan Islands, a distinction covered in detail on this site's Waterway Living page. But living near the terminal carries its own real, practical cost in time rather than dollars: summer sailing waves back vehicle traffic up along the terminal approach roads and, at peak moments, into town itself, and a property near that corridor should be evaluated with that seasonal traffic pattern in mind rather than assumed to be a quiet residential street year-round.

For anyone planning to use the ferry regularly -- to reach a second property in the San Juans, for instance, or simply for recreation -- Washington State Ferries fares add up as a real, recurring cost, and the route's mandatory reservation system (in place since January 2015 due to chronic overcrowding) means planning ahead is now part of the cost of convenient access, not just a courtesy.

Short-Term Rental Restrictions Change the Investment Math

A buyer modeling Anacortes as a vacation-rental investment needs to know this before running any numbers: the City of Anacortes has prohibited new short-term rentals (defined as overnight lodging for fewer than 30 consecutive nights) in residential zones since a 2019 ordinance, and extended that prohibition to the Commercial, Central Business District, Marine Mixed Use, and Commercial Marine zones under a March 2024 ordinance effective April 2, 2024. Existing, already-licensed short-term rentals in those zones were grandfathered and may continue operating with a current city business license and required off-street parking, but new licenses are not being issued in any of these zones. This is a materially different regulatory environment than many other markets on this site, and it is covered in full on this site's Vacation Rental Investment page -- but it belongs here too, because it directly affects whether a specific property's holding cost can realistically be offset by short-term rental income at all.

What This Page Does Not Know

This page does not have a confirmed, single, current Anacortes-specific median home price -- Redfin, Zillow, and other aggregators disagreed with each other by tens of thousands of dollars across roughly the same window, and this page reports that disagreement rather than resolving it into an invented figure. It also does not have a confirmed current Anacortes-specific earthquake-insurance premium, a confirmed exact combined sales-tax rate for Anacortes as distinct from the general Skagit County range, or a confirmed figure for typical utility costs (electric, water, sewer, garbage) on a specific property.

Before making a purchase decision, get a full, current combined property tax bill for the specific parcel from the Skagit County Assessor's Office, an actual homeowners and earthquake insurance quote from a Washington-licensed broker, and current utility rate information from the City of Anacortes' Public Works Department.