A House bill in the current legislative session would make the real estate excise taxes (REET) the highest in the U.S. for property owners in Washington state.
Added funds would go towards building subsidized housing.
If passed, HB 1628 would create a new REET rate of 4% for real estate sales of $5 million or more. The state’s REET was just 1.28% before 2019, when a graduated rate was applied to sales, allowing local governments to impose their own REET.
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The highest REET rate currently belongs to King and Snohomish counties at 3% for sales above $3,025,000.
“This would put a 4% tax on that sale of anything over $5 million. That is a lot of money, and the opponents say this would be the highest REET tax in the country at 4%,” KIRO Newsradio’s Matt Markovich said on The Gee and Ursula Show. “I mean, we’re talking about homes, but apartment buildings have a lot of affordable housing. And apartment buildings, you buy one or two, they’re not cheap, they’re a couple of million dollars minimum.”
The bill is sponsored by former House Speaker Frank Chopp, a Democratic representative who’s been in office for nearly 30 years.
“He knows how to work state government, he’s the Oz behind the curtain in a lot of these bills,” Markovich said. “He knows how to count the votes. He knows how to push this.”
Markovich stated that despite those not owning a $5 million property, this bill would affect most residents as it would add a quarter percent excise tax for cities and counties on local sales, no matter the price.
“You have a quarter percent tax on just the regular Joe’s who have any kind of property sale that goes to city and counties,” Markovich said. “They don’t have that right now. They want something like that to build their own housing.”
The state earned $1.8 billion in 2021 from the tax increase in 2019, according to the Washington State Department of Revenue, a near-50% increase over the $1.2 billion the state was receiving before the jump.
The revenue from the tax is also to help fund the Developmental Disabilities Trust Fund (DDTF) in addition to affordable housing. DDTF is a program with goals to allow individuals with developmental disabilities to set aside funds for future use without affecting their eligibility for government services and benefits, such as Supplemental Security Income (SSI) and Medicaid.
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“They don’t have to vote on this right away. It’s sitting there in the wings, and they don’t know whether to pass this tax — the legislators, the Democrats — or not because the money would go into what’s known as a Housing Trust Fund, and the Senate and the House both have contributed $400 million in their budgets to this fund more than ever,” Markovich said. “So there’s a lot more money now in this budget than ever for affordable housing, this would add to it.”
Listen to Gee Scott and Ursula Reutin weekday mornings from 9 a.m. – 12 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.
This content was originally published here.
