On March 31, 2025, Washington REALTORS® issued an official call to action, urging members across the state to speak out in opposition to Senate Bill 5798 (and its counterpart HB 2049). This proposed legislation could dramatically reshape how property taxes are assessed and increased, affecting every corner of the housing market.
For REALTORS®, this isn't just another policy debate. It touches affordability, homeownership stability, and consumer confidence—three pillars that define your profession and the clients you serve.
What Is Senate Bill 5798?
Since 2001, Washington has limited annual property tax revenue increases to 1 percent unless voters approve more. This protection, created by Initiative 747, was passed with strong public support to ensure tax predictability and voter oversight.
SB 5798 would replace that fixed cap with a flexible formula based on inflation and population growth. Under this structure, taxing districts could increase property taxes each year without returning to voters for approval. If inflation and population both rise, so would the tax burden.
How the Proposal Works
The bill calculates a new limit factor each year using the Consumer Price Index (CPI) and official population growth estimates. While this may sound technical, the outcome is simple: higher local tax bills without direct voter consent.
Additionally, the bill allows governments to exceed even this new formula by declaring a “substantial need” for increased funding, particularly for services related to public safety or community protection. This clause provides broad discretion to justify additional tax increases.
Supporters Say It's About Flexibility
The Association of Washington Cities (AWC) and many local officials argue that the current 1 percent cap is too restrictive and no longer reflects economic reality. They point to rising costs for infrastructure, law enforcement, and social services as examples of where more flexibility is needed.
They also emphasize that SB 5798 does not automatically raise taxes. Instead, it gives local governments the option to increase tax revenues if they choose, based on local conditions. Some cities, they argue, do not even take the full 1 percent each year.
According to supporters, the typical impact on homeowners would be modest. AWC estimates that the average annual increase would be under $20 for most households.
Opponents Warn of Long-Term Consequences
Critics, including many REALTORS® and public officials, caution that this legislation would remove a vital check on local taxing power. The concern is not just about one year's increase, but the compounded effect over time. Without a firm cap, annual increases based on economic fluctuations could add up quickly.
Another key concern is the bill’s broad exemption clause. The “substantial need” language is vague and could be interpreted to include almost any local program, making it difficult for citizens to challenge or limit the increases.
Representative Jim Walsh has argued that Washington’s tax model is already backwards. Instead of setting tax rates based on property values, local governments in Washington calculate how much money they need, then divide that number among taxpayers. This system, he says, prioritizes budgets over fairness and puts additional pressure on homeowners.
Why This Matters to REALTORS®
The impacts of this bill go beyond tax policy. They directly affect the housing market in the following ways:
1. Affordability Strain
Higher taxes increase monthly housing costs. For first-time buyers and lower-income households, that could mean the difference between qualifying for a mortgage or not.
2. Pressure on Fixed-Income Households
Many homeowners—especially seniors—are already stretched thin. Sudden or compounding tax increases may force them to sell or downsize sooner than planned.
3. Rent Increases
Landlords faced with higher property taxes may need to raise rents, passing on the burden to tenants who are already struggling with affordability.
4. Distorted Inventory Turnover
Rising tax bills may lead to more listings, but not for healthy reasons. People might sell under pressure, not by choice, which affects neighborhood stability and client well-being.
5. Market Uncertainty
Buyers ask for clarity. When tax policy becomes unpredictable or hard to explain, REALTORS® face greater difficulty advising clients and setting expectations.
Where the Bill Stands Now
The Senate Ways and Means Committee held a public hearing on SB 5798 on March 31. While that hearing is over, the bill remains active. It could still advance toward a floor vote, and similar proposals (like HB 1334 and HB 2049) continue to circulate in the legislature.
What REALTORS® Can Do Moving Forward
Even though the hearing has passed, REALTORS® still have an important role to play. Here's how you can stay involved:
Final Thought
Washington REALTORS® launched a statewide call to action on March 31 for a reason: SB 5798 changes more than just a number on a bill. It changes the relationship between local government and the property owners you serve.
Whether you focus on residential sales, investment properties, or rental markets, this proposal touches the core of your daily work. It affects affordability, stability, and your ability to advise with confidence.
Staying engaged is how we defend smart policy and a healthy housing market. Make your voice heard—and help protect the future your clients are building.
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