A new tax on real estate sales whose revenues will help fund affordable housing, took another step forward Friday.
The tax, known as a real estate excise tax or REET, isn’t automatic. It would have to be approved by a local city council and it would apply to property sales above $750,000.
The proposal is strongly opposed by the Washington State Association of Realtors, which has recently launched an ad campaign against it.
Republicans have also pushed back against the tax.
In a hearing Friday, Representative Ed Orcutt, a Republican from southwest Washington, said he was concerned the tax could hurt home sellers.
“People that are moving because they're trying to get a job, and they're trying to move up, now a higher cost to sell their home, means they have less money to put down on the next one,” Orcutt said.
Representative Alex Ramel, a Bellingham Democrat, said the need for more affordable housing is underscored by thousands of people across the state that have been forced into homelessness because of rapidly rising rents.
“There's a real sense of desperation for those folks, and market rate housing is never going to solve that problem,” Ramel said.
Supporters of the bill as well as Democrats, say they are addressing challenges in the housing market through bills that streamline the permitting process and loosening local zoning codes. They say an investment in affordable housing is needed however to address the state’s most vulnerable residents, who have been shutout of market-rate housing.
The REET bill is considered essential to pass the state budget, which has to be approved by April 23. Now that the tax proposal has passed out of the finance committee, it can be pulled onto the House floor for a vote.
