Washington Democrats are again looking to raise taxes on expensive property sales to help pay for affordable housing.
A bill that dropped Tuesday would add a tax to the sale of real estate over about $3 million. Revenue from that tax, estimated at just under $300 million every two years, would provide a funding stream to pay for affordable housing projects. The bill would also decrease the tax rate for property sales under $750,000.
“We’ve made a commitment to housing,” said sponsor and House Finance Chair Rep. April Berg, D-Mill Creek. “We’ve made a commitment to Washingtonians to help them at their kitchen tables with their expenses. This bill does both.”
This idea is not new, Berg said. It builds on a similar proposal last year that would have raised the real estate excise tax at the state and local levels to fund affordable housing. That bill, sponsored by Rep. Frank Chopp, D-Seattle, never made it out of the House, despite a late-session push by lawmakers to get it over the finish line.
Realtors and property owners sharply criticized the part of the previous bill that allowed local governments to raise real estate excise taxes – which are taxes on the sale of property.
Chopp told the Standard earlier this month that the new version of the bill eliminates the local option and focuses only on modifying tax rates at the state level.
He called the current proposal “very progressive” because it would lower the tax rate for people selling less expensive property, raise it for pricier sales, and help expand low-income housing.
“We need an ongoing revenue stream to help pay for affordable housing,” Chopp said.
Republicans see the situation differently and argue that the tax proposal could raise the sale price of apartment buildings and, in turn, rent for tenants.
