Washington state legislators have approved a new bill that will make it more expensive for residents to pay for their home and other bills, but the measure could make the state’s tax system even more regressive.
The state Senate approved a measure Monday that will let homebuyers pay $1,000 to $1.5,000 less for their first $1 million in home purchases.
It will also lower the threshold for those who already own their home from $1million to $750,000, and the state will give tax breaks for first-time buyers and homeowners who move to another state.
“This is a good step in the right direction, and hopefully it will help the state more than it hurts,” said Tom Lasswell, a senior fellow at the Tax Policy Center, a liberal-leaning think tank.
The legislation is the latest effort by the state legislature to crack down on homebuyer over-spending, with some legislators also seeking to expand eligibility for the tax breaks.
The bill also includes a provision that would make it easier for homeowners who already owned their home to get it back.
The new measure would help reduce the state government’s $3.6 billion deficit, according to state estimates.
The savings would be used to improve education, health care, and transportation.
But some homebuyners said they’re worried that the measure would allow them to avoid paying taxes.
“I just don’t think that the state is going to get all the money they need to build our schools and public infrastructure, or to rebuild our public schools, and all the other things that are going to help our state, and we want to help the government,” said Nancy Deering, a homeowner who lives in a home in a neighborhood where the tax credit would be worth $300 a month.
“That is not fair.
That’s not fair to my family.”
Supporters say the measure will help ease pressure on the state from its largest real estate company, REIT Capital Group, which is under investigation for possible tax fraud.
The measure also would make a $500 credit available for homebuying to help people who buy homes with no equity in them.
The credit would also be available to first-timers who have a down payment of $250,000 or less.
The Senate voted 50-3 on the bill, with one Democrat voting against it.
It passed the House by a vote of 48-16.
A spokesman for REIT said it will provide details about the tax credits next week.
“While the Senate has not yet taken up the legislation, we will provide more information on our tax credits as we make it a reality,” spokesman Mike Riggs said.