NAIOPWA 2019 Legislative Agenda: Coalition for a More Affordable WashingtonWashington State legislators are considering large increases to the state Real Estate Excise Tax (REET). Impacts on the commercial, industrial and multifamily real estate market include:
Washington State already has one of the highest REET percentages in the country. According to ECONorthwest, the magnitude of the proposed increase is likely to have a net negative effect on revenue: fewer transactions at higher rates, rather than frequent transactions at more modest rates, ultimately reducing tax revenues. (Read more.) NAIOPWA has formed the Coalition for a More Affordable Washington to ensure lawmakers hear the input of the commercial real estate industry. We can support the state’s economy and affordability by providing our expertise and advice, avoiding unanticipated consequences of proposed changes. The coalition’s efforts support NAIOPWA’s effective, on-the-ground lobbying efforts with the added heft of industry allies to broaden and strengthen the voice of opposition. This grassroots coalition is intended to engage NAIOPWA and industry peers from across the state and across development types to ensure a fair result for our state and our industry. Get Involved to Support a Strong IndustryIn 2018, the Puget Sound region saw $16 billion in investment sales, including office, retail, apartments and industrial properties. New and increased taxes, fees and regulations threaten to curtail growth. With Washington’s legislative session half over, we urgently need your support. Support the Coalition with a Financial ContributionContribute online now or email Peggi Lewis Fu, [email protected], with a donation amount to receive an invoice by email. Contribute online todayContact Your LegislatorsLet your representatives know how this tax would impact your business. Find your State Senator and two House Representatives here: https://app.leg.wa.gov/DistrictFinder/, or simply call the legislative hotline and leave a message that will be delivered on your behalf: 1-800-562-6000 The hotline is open from 8 am to 7 pm weekdays. Be prepared to give your name and street address to help staff direct your message to the appropriate legislators. Call or email your legislators’ offices.
Learn More about the Proposed Graduated REET & Potential ImpactsPlease note: The situation is changing rapidly. While we strive to provide the most useful information here, if you have questions, please contact [email protected]. Thank you. Earlier this year, NAIOPWA asked ECONorthwest, an economic consulting firm advising governments, business, and foundations, to provide perspective and commentary on the community and economic development impacts of land excise taxes related to proposals to expand these taxes in Washington. REET and other land transfer taxes are fairly inefficient forms of taxation and raise significant questions about the suitability of a property transaction tax as a robust policy instrument. Real estate excise and transfer taxes are used by states and local government. However, little research has been done to catalog or assess the impacts of these taxes. The Lincoln Land Institute has an active research program to survey these fees and taxes by state and local government. These data are summarized in the map below as of 2017. The Lincoln Land Institute of Land Policy is a nonprofit foundation that seeks to improve quality of life through the effective use, taxation, and stewardship of land as a solution to economic, social, and environmental challenges. SUMMARY FINDINGS
Read the Report HereAs of Monday, April 1: The House budget proposes to change the REET starting on January 1, 2020. The new state REET rates would be:
Additionally, the House proposes a surcharge for certain service businesses and a capital gains tax. The Senate budget proposes to change the REET starting on July 1, 2019. The new state REET rates would be:
The Senate proposal also includes the elimination of selected tax preferences and a capital gains tax; the capital gains tax is not part of their budget proposal. If the capital gains tax were to pass, it would fund several additional programs in addition to the base budget. *The current state REET is 1.28%, to which local REET options are added. |