Supporters of House Bill 1628 in Washington State are calling for action by lawmakers to hike taxes on real estate sales and fund low-income housing. Despite being able to raise billions of dollars in the coming years, the Washington Realtors are opposed to the bill, claiming it would add costs to the transactions they are involved in. HB 1628’s supporters have dismissed this argument, stating that the bill’s “modest” tax increases wouldn’t drive up rents and home prices. The funds raised from the bill are desperately needed to create more subsidized housing to reduce homelessness.

Bill would authorize higher real estate excise taxes at state and local levels, with revenue going to affordable housing

The bill would establish a dedicated revenue stream for affordable housing, making it a game-changer in reducing homelessness. The fate of HB 1628 is uncertain with under three weeks of the session to go, but it would authorize higher real estate excise taxes at the state and local levels. The bill would also allow city councils across Washington to raise more money at the local level. The top-tier excise tax would increase from 3% to 4% on the portion of a sales price over $5 million, and the bill would allow cities or counties to tax the entire price of property sales at 0.75%, up from 0.50%, with extra revenue required to fund affordable housing.

Proponents believe the extra revenue would benefit low-income renters, people with medical hardships, and people experiencing homelessness, among others. The bill could raise about $288 million for the state and $214 million for local governments in the 2026 fiscal year, increasing to $443 million for the state and $289 million locally in 2029’s fiscal year, according to a fiscal note.

The issue of affordable housing in Washington State has been a long-standing problem, and many lawmakers and advocates have been pushing for solutions to address it. With the current legislative session coming to a close in under three weeks, the fate of House Bill 1628 remains uncertain.

Realtors oppose House Bill 1628, claiming it would add costs to transactions, but supporters dismiss their argument

Despite opposition from the Washington Realtors, who argue that the bill would add costs to their transactions, supporters of HB 1628 believe that the modest tax bumps would not significantly drive up rents or home prices. They argue that the funds generated from the increased real estate excise taxes are desperately needed to create more subsidized housing and address the homelessness crisis.

The bill would establish a dedicated revenue stream for affordable housing, which currently relies on biennial budget negotiations by lawmakers. It would also allow city councils around Washington to raise more money at the local level.

If passed, the bill would add a new tier to Washington’s real estate excise tax, applying a 4% rate to the portion of a sales price over $5 million, with the extra revenue going to affordable housing. The bill would also allow cities or counties to tax the entire price of property sales at 0.75%, up from 0.50%, and require the extra revenue to fund affordable housing.

Despite concerns about the impact on the real estate industry, supporters hope the bill will provide much-needed funding for affordable housing and reduce homelessness

Despite the potential revenue generated by the bill, some critics have raised concerns about its impact on the real estate industry and the overall economy. However, supporters argue that the bill would take only a small fraction of the profits generated by soaring property values in recent years and would help fix a broken system for those at risk of becoming homeless.

With talks ongoing between lawmakers and supporters of the bill, it remains to be seen whether HB 1628 will pass in the current legislative session. However, advocates remain hopeful that the bill will provide much-needed funding for affordable housing and help reduce homelessness in Washington state.