Bill Would Make WA Real Estate Excise Tax Highest in Nation
Move over New York or California.
If Democratic legislators get their way, our real estate excise taxes will become the highest in the nation.
Democrats want to use tax revenue to pay for subsidized housing
House Bill (HB) 1628 would raise the tax, from a rate of 1.29 percent to a whopping 4 percent, making it higher than any other state.
An excise tax is what is paid as part of the transfer or sale of property from one person or party to another. As defined by Redfin (realty) online:
An excise tax is a tax on the transfer of ownership from the seller to the buyer paid at closing. The tax amount is based on the sale price of the home and varies by state and local government. It's paid by the seller to the escrow agent or the attorney responsible for closing the deal, who then pays it to the government. "
Excise taxes are not exclusive to just real estate, but in this case, the tax would be dramatically increased. The amount charged is that percentage of the value of the property, so a $100K sale, at four percent, would be a tax of $4,000.
MyNorthwest.com reports the bill would apply the 4% tax on anything sold with a value over $5 million, but would also place a quarter percent excise tax on all over real estate sales in cities and counties--affecting tens of thousands of "regular folks."
Where would the money go?
According to MyNorthwest.com:
"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."
Will it be voted on soon?
One expert who spoke with MyNorthwest.com said "they" (legislators) won't vote on it right away, and hinted that legislators are not sure how to proceed.
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