The real estate industry is in the middle of a “federalization” in which Washington state has become the de facto central hub for the real estate market, the owner of a new real estate development company says.
The Spokane Real Estate Board (SPREB) is a joint effort between SPREB and the Spokane Valley Chamber of Commerce, which is lobbying to get a local ordinance passed to establish a real estate sales tax.
According to the ordinance, Spokane County would pay the tax for the first $50,000 of sales, but then any new sales would have to be taxed at the same rate as the existing tax.
“This will result in significant revenues for our county, as well as for our local economy, but it will not create enough jobs to replace the jobs lost during the recession,” the ordinance says.
It goes on to say that Spokane County’s tax base will remain “strong.”
It’s an idea that some residents, including Spokane Valley residents, are skeptical of, particularly after the realtors association called the proposed ordinance “a step in the wrong direction.”
“This is all being done under the guise of helping the people of Spokane,” the realtor association said in a statement.
“The local real estate community, however, is in a dire economic situation.
They are struggling to stay afloat in a global marketplace.”
“We’re very concerned that this kind of economic policy, coupled with the rise of the Internet, will result on a local level in a loss of the local realtours business, and it could very well result in local people losing out,” SPREBB president Dan Kranz said in an interview.
“That is a bad outcome for everyone.”
Spokane Valley realtour owners are concerned that the tax could lead to the loss of their business.
“If they just put it on paper, it’s just going to become an automatic tax,” said Joe Krakocz, the president of the Spokane County Chamber of Business.
“And the only thing that would stop that is if people really did decide to boycott Spokane.”
The proposed ordinance has sparked some criticism, including from the real-estate association, which said that the council members had not been consulted on the plan.
The realtor-association’s statement also said that a recent poll showed that 64 percent of the community believed Spokane’s real estate tax would raise more than $50 million a year, and that the realty industry’s tax rate was one of the highest in the nation.
The local realtor’s association is urging the council to reconsider the ordinance.
“We are extremely concerned about the potential impact on our business, our employees and the people that live in our community,” Krakicz said.
The city’s proposed tax plan will be voted on in the spring.
The council’s first meeting will take place on Tuesday, May 18, at 7:30 p.m. in the Spokane City Council chambers.
