OLYMPIA, Wash. — The original budget proposals from the state House and Senate released earlier this year did not call for tax increases. But Friday morning, a House committee passed a bill that could raise the tax on selling a home.
House Bill 1628 would allow the state, counties and cities to modify their real estate excise taxes. The additional funding raised -- an estimated $200,000 a year -- would be used to increase the supply of affordable housing.
The House proposal would allow cities or counties to raise the local real estate excise tax by 0.25% beginning Jan. 1, 2024.
The bill could lower taxes for some because it raises the threshold for those subject to the lowest rate. Currently, the selling price for homes up to $525,000 is taxed by the state at 1.1%. Under the proposal, the lowest rate would apply for homes selling up to $750,000.
However, the rate would increase a half a percentage point for properties worth more than $3.025 million; that includes apartment buildings.
Republicans argued the proposal would make homes less affordable.
"People that are moving because they're trying to get a job and they're trying to move up, now have a higher cost to sell their home," Rep. Ed Orcutt, R-District 20, said. He added that higher cost means people will have less money to put toward a new home and, "this does affect affordable housing."
The bill's sponsors say it's one solution to the state's ongoing housing crisis.
"We understand that revenue is functionally taxes. Taxes on people, taxes on businesses," Rep. April Berg, D-District 44, said. Berg said they "take it very seriously," and "at this moment, we have a very serious crisis with housing and I believe this is a tool we can use as a state to address it."
On Thursday, April 13, Gov. Jay Inslee said he supports the idea as the state needs to find ways to build more affordable housing. His proposal to borrow billions of dollars does not appear to have much support in the final days of the legislative session in Olympia.
In the state Senate, Bill 5770, which would raise property taxes, has been proposed but has not passed out of committee.