Sen. Dino Rossi says the higher real-estate taxes proposed by majority Democrats in the state House of Representatives will likely lead to another jump in rents as well, making King County’s rental market even less accessible.
“While it has been billed as a tax on the wealthy, an increased real-estate excise tax is almost certain to hurt working families who rent,” said Rossi. “In their zeal to cash in on the skyrocketing home values that have affected the supply of affordable housing, did House Democrats even consider how this part of their $8 billion tax package could harm low-income renters?”
To help offset the new government spending they propose, House Democrats want to drop the state’s uniform real-estate excise tax and raise the tax on larger transactions. This includes a 56-percent increase in the excise-tax rate for properties valued between $1 million and $5 million and a 95-percent increase for properties valued at more than $5 million.
According to the state Department of Revenue, one-quarter of the anticipated $860 million in revenue generated over four years by the Democrat tax increase would come from the sale of apartment buildings. That would mean a $207-million tax increase on the state’s renters.
“Housing is about much more than just home ownership. The House tax grab ignores the impact on people who have already sought out affordable places to live,” said Rossi, R-Sammamish, who serves as vice-chair of the Senate Ways and Means Committee.
“Whether it’s the $2 million apartment building in Tukwila or the $7 million housing complex in South Seattle serving working families, there are countless examples of high-value properties already serving low-income residents that would see dramatic increases in tax rates, which would increase the cost to existing renters.”
Additionally, King County property owners would collectively see an additional $659-million cost increase over the same four years under a House proposal to lift the existing 1 percent cap on property-tax growth for local governments alone.
“Rental housing that is marketed directly to low-income families in Seattle and surrounding communities would go up in price,” said Rossi. “While I appreciate my colleagues’ interest in making it easier for families to buy a home, a tax increase that leads to higher rents will simultaneously make it harder for those families to save the money they need. It’s a disservice to those trying to make ends meet. They deserve a more thoughtful approach from their lawmakers.”