Dear WSCAR members:
As we say goodbye to 2018, I have to tell you that I had a great year as your WSCAR President, and I want to thank you all for the privilege to represent you and to work on your behalf. I am looking forward to a remarkable 2019, and I know that incoming president Michael Schoonover will do you proud.
In March I was privileged to go to the MIPIM international conference, where Washington State was represented for the first time. Having the opportunity to talk to everyone about the Seattle metro area as the number one city in the US was a treat. Our state is truly being recognized as an international powerhouse in technology and business, which will lead to future growth in our industry.You can read more of my thoughts here, and also why this conference is so important HERE.
There are great new deals for CRE investors in the new Opportunity Zones: these are fantastic places to place your clients funds with tax advantages not available anywhere else. I was interviewed for CCIM’s magazine Commercial Investment Real Estate about this, and there was an Executive Order signed about this just last week.
One change to tax laws this past year is the 199A, which can affect you and your clients’ small businesses with a potential 20% deduction for qualified recipients. NAR has a series of videos here that walks members through the benefits.
I want to close by reminding you that Legislative Day 2019 (see below) is only a month away. We are expecting legislation that will greatly affect our industry, which could include much higher REET (Real Estate Excise Tax), an increase of B&O tax rates on service businesses, and a 9% tax on income from capital gains which INCLUDES commercial real estate sales. I heartily recommend that you attend this event and help to represent WSCAR.
And whether or not you can make it, you should reach out to your legislators now and tell them your thoughts on these upcoming tax issues, for both you and your clients. You can go here to get contact information on the people who represent your district.
Happy holidays, and I look forward to seeing you in the coming year.
Chad Gleason, CCIM
Executive Managing Director
The National Association of REALTORS® sends out occasional alerts of actions needed within your region.
Click here and take two minutes to make sure you stay informed about what you can do to help protect the industry and your livelihood.
The National Association of REALTORS® sends out occasional alerts of actions needed within your region. Click the link below and take two minutes to make sure you stay informed about what you can do to help protect the industry and your livelihood.
The Hotel RL Olympia
2300 Evergreen Park Dr. SW
Olympia, WA 98502
January 23: Committee Day and Installation Banquet
January 24: Legislative Day and Legislative Reception
The annual Legislative Day is a gathering of hundreds of REALTORS from around the state. This is your chance to advocate for the CRE industry and to talk directly with lawmakers who help decide owners’ property rights, land-use policies, economic development, taxation, and more.
At this event, you will:
• Hear from industry and legislative leaders about the state’s most important challenges
• Learn firsthand why legislators like to hear from proactive constituents about issues
• Discover how you can help us accomplish our legislative goals
Invest a day in Olympia to protect our industry!
Please go HERE for more details and to register.
With less than a month to go before the start of the 105-day 2019 Legislative session, I want to share a few issues with our members that I believe will be considered during the session.
We need to be ready for a variety of tax proposals that would have a negative impact on the commercial real estate industry. For the past several years progressive tax supporters have introduced Capital Gains Income Tax proposals. While single-family residences and four unit or fewer multi-family units have been exempted from these bills, the balance of commercial real estate is included. Many small commercial real estate investors would be subject to a new 7-8% Capital Gains “income” tax.
We’ll likely see proposals to increase the Business and Occupation tax for service industry providers from the current 1.5% rate.
The progressive tax reform group will also re-introduce a proposal to increase the Real Estate Excise Tax state portion from the current 1.28% level. These bills would significantly increase the rate for properties in excess of $1,000,000 and nearly double the state-rate for properties over $5,000,000.
The Washington Association of REALTORS® has an ambitious agenda to promote greater home ownership, housing affordability, and reducing homelessness.
The campaign is called “Unlock the Door”, and it has several components that help the commercial real estate industry. The first issue is legislation addressing condominium liability. There have been virtually no affordable, market-rate condominium projects developed in recent years. Clarifying developer liability would encourage more multi-use projects.
In addition, legislation enhancing the Multi-Family Tax exemptions for existing projects would add to the housing stock. This proposal would be a huge benefit to commercial real estate investors.
The final issue of concern is making certain proponents don’t pass legislation removing the local ban on rent control. While we were successful defeating this proposal in 2018, the make-up of the 2019 legislature will make this effort more challenging.
We are certain there will be additional policy bills impacting the commercial real estate industry, and we’ll keep you apprised of developments throughout the session. Please mark your calendars for Thursday, January 24 in Olympia and join us for our 2019 Legislative Hill Day. Registration and information can be found at WaRealtor.org.
WSCAR Government Affairs Director