• A first-time home sale generates more that $15,000 in state and local revenue needed for vital services, from schools and roads to health care and clean water.*
• Every 1000 first-time home sales produce $112.4 million in economic activity in our state.*
• Every 1000 first-time home sales produce 700 jobs-almost one job per home sale.*

*Impact Report: Economic and Fiscal Impact of First-time Home Buyers, Feb. 2009

The real estate market in Washington from 2003 to 2006 was credited with bolstering jobs and revenue collections that exceeded forecasts for more than a dozen consecutive quarterly revenue reports, leading the US out of the recession after 9/11.

At present, policy makers are discussing options to bridge a nearly $3 billion budget deficit by establishing taxes on services, closing tax exemptions and increasing existing taxes, including the Real Estate Excise Tax, the Business & Occupations tax, among all others. “All taxes are on the table.”

What impact will the proposed increase in the Real Estate Excise Tax or instituting a real estate services tax have on the real estate market and thereby the economy?

·        Real estate excise taxes (REET) are a volatile source of revenue and Washington’s is already one of the nation’s highest

·        An increased REET would reduce the availability of affordable housing.

·        68% of home buyers cited low home prices as the number one factor to buy now.

·        Families would face higher closing costs and need even more income to qualify for a home loan. With a present 1.78 percent REET on the sale of a $260,000 home (the state’s median home price) the real estate excise tax would take as much as $4,628 out of homeowners’ equity.

·        According to the National Center for Real Estate Research, as little as a .65% increase in the REET means more than 19,000 people in Washington would get priced out of the housing market (2006).

             Sales Tax on Services

·        A sales tax on business and professional services would impose multi-layered harm on housing affordability as it would be passed onto consumers in the price of a home.