The proposed bill seeks to tackle the shortage of affordable and workforce housing in Washington State by restructuring the real estate excise tax. It introduces a tiered tax rate for property sales, with lower rates for properties sold under $3,025,000 and a higher rate of 3% for those above this threshold. Additionally, a new real estate transfer tax of 1% is established for high-value property sales, with the generated revenue directed towards housing-related funds, including the Washington housing trust fund and support for individuals with developmental disabilities and low-income households. The bill also emphasizes the need for government intervention to ensure affordable housing options for low to middle-income residents, addressing the inequities in the current tax system.

Moreover, the bill amends the definition and scope of "sale" in real property transactions, clarifying that it includes the transfer of controlling interests in entities with real property interests within a 36-month period. It outlines exemptions from the definition of "sale," such as transfers by gift or inheritance, and establishes provisions for low-income housing developments and supportive living arrangements for individuals with developmental disabilities. The legislation introduces the "Affordable Homes Act," defining nonprofit organizations and ensuring that property transfers to qualifying entities for low-income housing are tax-exempt, provided they meet specific conditions. The bill aims to enhance the framework for real estate transactions while promoting affordable housing initiatives, with certain sections set to take effect in 2026 and others expiring in 2030.

Statutes affected:
Original Bill: 82.45.060, 43.330.181, 82.45.010