A smaller real estate tax hike on the move

Plus House derails transit-oriented housing bill and PSE's gas bill runs aground in the Senate

That proposal to tax real estate transactions to pay for affordable housing that we wrote about a while back looks like it’s on the move. House Bill 1628, from Rep. Frank Chopp, D-Seattle, is up for both a hearing and vote in House Finance this morning. A proposed revision would get rid of the new higher tier of taxation on transactions over $5 million. Instead, it would increase the existing maximum tax — on transactions above $3.025 million or more — from 3 percent to 3.5 percent.

Here’s why you should care about this: That makes the bill more about increasing the local version of the REET. It would allow local governments to charge an additional .25 percent tax on all transactions on top of the .5 percent most cities already charge. Unlike the proposed state increase, which would hit sales on a handful of stupid-fancy mansions and most apartment buildings, the local REET would be levied on all real estate transactions. For example, it tacks $1,250 onto the price of a $500K house.

The REET when this stuff sells is a nice chunk of change. (Image by Shutterstock.)