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House Bill 2276 (HB 2276), sponsored by Representative April Berg (D-44), would increase the taxes by 1% on homes priced at over $3.025 million. While this would affect homebuyers that are buying more expensive homes, there will also be significant, negative impact to multi-unit, townhomes and condo buyers.
The majority of homes valued over $3 million are multi-unit homes and are used as rental units or condos.
There are currently 25 single family homes over $3 million for sale in Seattle zip codes, according to Zillow.
The bill would also increase a lower tax threshold from $525,000 to $750,000 which would save the homebuyer $250 on the sale of homes under $750,000.
For new multi-unit properties, the additional 1% tax on buildings valued at $3 million or more, would be passed onto the home buyer (or renters) in the form of an increase in the cost of the condo or rental unit.
As an example, a homeowner buying a $750,000 condo in a building valued at $7.5 million, would pay $4,250 more.
A new rental property could see several hundred dollars a month in increased rent to cover the additional cost.
HB 2276 would not decrease the cost of home purchases for the majority of home buyers. Instead, it would increase the cost of buying a new condo for new home buyers. It would also increase rental costs for new apartments.
HB 2276 is a thinly disguised tax revenue grab and is not going to help reduce home prices.