2019 Session Ends with Big Wins for Washington REALTORS®

Governor Jay Inslee signs SB 5334, an Unlock the Door for Affordable Homeownership bill designed to reform condo liability laws (and increase condo development). Governor Jay Inslee signs SB 5334, an Unlock the Door for Affordable Homeownership bill designed to reform condo liability laws (and increase condo development).

The 2019 session adjourned for the year on Sunday April 28 at 11:59PM. The 2018 election results meant big changes in the Legislature. We ended a successful 2019 Session by (1) protecting our members, (2) protecting their clients, (3) protecting real estate transactions and (4) providing opportunities to increase both commercial and residential real estate transactions.

We accomplished this by making housing the #1 priority in the Session with our “Unlock the Door to Affordable Housing” campaign. With the support of our members, our coalition partners and the most influential PAC in the state, REALTORS® took the first steps toward increasing housing supply and making housing more affordable in every price range.

Washington REALTORS® Leadership, Members and Staff in the Senate Chambers at the Capitol Building in Olympia, Washington.

Washington REALTORS® Protected Our Members

Our trade association’s primary purpose is to protect our members. With that in mind, we were successful in fighting off a direct tax increase on your bottom line. Although the Legislature passed a 20% B&O tax increase that hit most service businesses, REALTORS® were not included. We reminded the Legislature that the B&O Small Business Tax Credit does not apply to REALTORS® because commissions are pooled, and they agreed that exempting REALTORS® was both fair and a reasonable policy decision.

Additionally, we protected the foundation of the industry’s business model. When a bill was introduced that would have changed many independent contractors to employees, we made sure REALTORS® were exempted.

Above Photo: Washington REALTORS® Leadership, Members and Staff in the Senate Chambers at the Capitol Building in Olympia, Washington.

Washington REALTORS® Protected Your Clients

From the first days of the Legislative Session, we knew that the Legislature was committed to a tiered Real Estate Excise Tax, based on the idea that higher priced properties would pay more in REET. Although we did not support this proposal, the Legislature listened to us when we spoke and made significant changes, with the result that approximately 95% of transactions will pay the same or less Real Estate Excise Tax. All Transactions up to $500,000 will get approximately a 15% cut in REET. In fact, due to the marginal nature of the new tiered tax (a REALTOR® suggestion), all transactions up to about $1.6M should not be impacted. While this tax impacts commercial real estate and multifamily, it is hoped that the marginal nature of the tax structure will limit that impact. These new rates will not take effect until January 1, 2020.

Washington REALTORS® Protected the Transaction

Very early in the session, a bill was introduced in both the House and Senate to require all parties in an “in-house” transaction to have an attorney sign off at every step in the transaction. Obviously, this bill would make real estate more expensive for consumers and greatly impede transactions. Washington REALTORS® jumped in and made sure this proposal did not even make it out of Committee in either the House or the Senate.

Washington REALTORS® Worked to Increase Transactions

Washington REALTORS® played a big role in passing condominium liability reform that continues to protect the consumer but adds a fairer standard that should encourage developers to start building condominiums again. After looking at the more balanced bill, one developer told us that once developers got comfortable with the new regulations, we should expect a “mini condo boom” in Washington. Additionally, while working with a number of stakeholders, the legislature passed a bill that encourages large cities to adopt growth policies that allow for additional density in a responsible way, including Accessory Dwelling Units, allowing duplexes and triplexes in single family zoning and cluster zoning or lot size averaging allowances.

Overall, in large part to our REALTOR® Party philosophy of working with officials on both sides of the aisle, Washington REALTORS® and our members had a winning 2019 season. Many thanks to all who helped carry the agenda over the finish line.



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