{"id":89,"date":"2005-11-17T18:56:00","date_gmt":"2005-11-18T01:56:00","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/?p=89"},"modified":"2005-11-17T18:56:00","modified_gmt":"2005-11-18T01:56:00","slug":"state-excise-tax-change-proposed","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2005\/11\/17\/state-excise-tax-change-proposed\/","title":{"rendered":"State Excise Tax Change Proposed"},"content":{"rendered":"

Realtors are gearing up for a fight in Washington State over a proposed change to real estate excise tax law<\/a>:<\/p>\n

The Washington Association of Realtors has launched a $1 million advertising campaign to warn home sellers of a proposed tax increase on the proceeds from their home sales.<\/p>\n

A buyer of a new home could find the purchase price increased “by an average of $9,000,” according to the campaign, although the ads don’t specify the size of the home in the example used.<\/p>\n

The media campaign began Wednesday, funded in part by a $750,000 grant from the National Association of Realtors. It is designed to build public opposition to a proposed change in the real estate excise tax, or REET. With advertisements running on local television and radio stations and in area newspapers, the effort is targeting a bill introduced in the last session of the state Legislature by Rep. Judy Clibborn, D-Mercer Island.<\/p><\/blockquote>\n

That’s amusing. If the real danger were to property buyers<\/i> of having to pay more, why exactly would the realtors care? It seems more likely to me that they’re concerned that the actual sale price<\/i> of homes might fall, as buyers would be unwilling to pay thousands more. Lower sale price = lower commission = realtors spending a million dollars to fight this. Which is not to say I support the change, it’s just an observation.<\/p>\n

Currently, the state real estate excise tax, paid by the seller at closing, is 1.28 percent of the final price of a property of any type, with counties and cities liable for meeting the requirements of the state’s Growth Management Act able to tack on an addition one-half of a percent. In King County, that means an effective tax rate of 1.78 percent on every property transaction.<\/p>\n

Under Clibborn’s bill, backed by home builders and the Association of Washington Business, school districts would be permitted to assess an additional quarter percent and cities four-tenths of a percent in lieu of the impact fees currently assessed against new residential construction. It would be up to each jurisdiction to decide whether to assess the excise tax or the impact fees.<\/p><\/blockquote>\n

Like I said, the cost is paid by the seller. It’s not necessarily the case that the buyer will be willing to just front it. So anyway, how does all this translate into real dollars?<\/p>\n

For instance, new single-family residential construction in the fast growing Kent School District, be it a small rambler or a faux chateau, currently comes with a $4,050 impact fee that is divided among the School District, local municipalities and other taxing districts.
…
With the proposed increase in the REET, the builder would be off the hook for the up front impact fees. But every home seller, in the case of a $300,000 home, could wind up with a $7,290 tax bill.<\/p><\/blockquote>\n

I’m shedding a tear for the person selling a $300,000 home—worth just $225,000 two<\/i> years ago—who has to pay an extra $3,240 in taxes.<\/p>\n

(Morris Malakoff, King County Journal<\/a>, 11.17.2005<\/i>)<\/p>\n

\n
Seattle Bubble Tip Jar<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Realtors are gearing up for a fight in Washington State over a proposed change to real estate excise tax law: The Washington Association of Realtors has launched a $1 million advertising campaign to warn home sellers of a proposed tax increase on the proceeds from their home sales. 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