Washington State REET Bill Revised in House Finance: Would Approve Change to Existing Minimum Tax on $3.025 Million to 3.5%

House Bill 1628, which proposed an increase of the Washington real estate excise tax, was tweaked by the House Finance Committee this morning. The original HB 1628 proposed expanding the real estate excise tax from its current three percent tax on transactions over $3.025 million to 4 percent on real estate transactions above $5 million. However, at a vote today in the House Finance Committee, the committee scrapped the increase to 4 percent. Instead, it approved a revision changing the existing maximum tax on transactions over $3.025 million or more from 3 percent to 3.5 percent. As a result, the bill has become more about increasing the local version of the real estate excise tax. 

In today's revision by the House Finance Committee, the committee argued over an amendment to exempt market-rate multifamily property (affordable multifamily is already exempted). The amendment was voted down. The committee also argued over whether city councils should be allowed to increase the REET tax without a vote of citizens. Again, most committee members voted not to put REET tax increases to local citizen votes. The newly revised bill would allow local governments to increase taxes by one-quarter percent on all transactions on top of the half percent most cities already charge, adding, for example, another $1,250 onto the price of a $500-thousand dollar house. 

The second substitute House Bill 1628 passed out of the finance committee on a vote of 8-5 with a do-pass recommendation. Legislators voting in opposition to the amended bill included Cyndy Jacbson (R) of Puyallup, Ed Orcutt (R) of Kalama, Amy Walen (D) of Kirkland, Stephanie Barnard (R) of Pasco, Drew Stokesbary (R) of Auburn. 

Watch the video from the discussion here. The discussion about the excise tax begins at about 25 minutes into the video.