Washington Association of Realtors Assists in Excise Tax Issue

Normally, you would not see a post from me regarding Association of Realtors’ actions with the legislature, however this one particular action and several others that they are taking will only benefit homeowners. We are seeing many home owners in positions where they must move, have personal problems, and cannot sell their homes for what they owe. Therefore, they must get permission from their mortgage holder (s) to agree to what is called a “short sale”. You’ve read about this, I’m sure. This is when the Seller’s lender forgives some of their debt. I had just received word from an escrow company that the Department of Revenue of Washington State had decided to TAX those same homeowners on the difference between what they owed to the mortgage company and what they actually did get from the sell of their home. That difference would be taxed 1.78%. So if I owed $200,000 on my home but only could get $150,000 on the sale of my home and the lender forgave me that debt, the State of Washington planned to charge an additional $890 worth of tax on that difference to the already upside down home owner. The Washington Association of Realtors met with the Department of Revenue folks this past week and got their decision reversed. This is great news for Home Owners! The link to the letter can be seen here:

Kudos to the leaders of my Realtor’s Organization. They’re also working with the National Assocation of Realtors & our State Legislature to encourage permanent tax credits for purchasing homes in 2009, reducing the interest rate on mortgages further, and increasing FHA limits permanently in areas like ours, where prices are still higher than the national average & it is very difficult, expensive and challenging to get jumbo loan financing.

Posted on January 14, 2009 at 5:17 pm
Debbie Barger Smith | Category: Uncategorized

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