Opposition to Senate Bill 6294: A Challenge on Grounds of Property Rights Violations and Barriers to Young Homebuyers

By Cindy Alia, 2/5/26

This bill had a hearing in the house today.  Unfortunately the majority of testifiers were government entities and health care providers, there was no time allowed for ordi% nary tax paying citizens to testify before the committee.  The companion bill in the house is moving quite quickly so without major amendments it appears the bill has a 40% chance of passing this year.  It will be costly, call the legislative hotline 800 562 2000!

CAPR Executive Summary and testimony provided.
Senate Bill 6294 (SB 6294), introduced in the Legislature of the State of Washington, proposes sweeping expansions of local government taxing authority, including increases in real estate excise taxes (REET), property tax levies, sales and use taxes, and utility taxes.

While the bill aims to fund affordable housing, homelessness services, mental health programs, and other social initiatives, it does so at the expense of fundamental property rights and creates significant impediments for young, first-time homebuyers.

This challenge argues that SB 6294 unconstitutionally burdens property owners and prospective buyers, exacerbating Washington's housing affordability crisis rather than alleviating it. We urge legislators to reject or substantially amend the bill to protect individual rights and promote accessible homeownership.

I. Violation of Property Rights

Property rights are a cornerstone of American jurisprudence, enshrined in the Fifth Amendment to the U.S. Constitution ("nor shall private property be taken for public use, without just compensation") and Article I, Section 16 of the Washington State Constitution, which prohibits the taking or damaging of private property without just compensation.

SB 6294 infringes on these rights by imposing new and expanded taxes that effectively transfer wealth from property owners and buyers to government programs, without adequate safeguards or direct benefits to those taxed.

• Expanded Real Estate Excise Taxes (Parts I and II):
• The bill amends RCW 82.46.035 and 82.46.075 to allow counties and cities to impose an additional REET of up to 0.5% on property sales (doubling the previous cap in some cases). This tax is imposed on "each sale of real property," making it a direct levy on private transactions. Revenues are earmarked for affordable housing and related projects, but this constitutes a forced subsidy from individual sellers and buyers to fund public initiatives.
• For property owners, this diminishes the value of their assets by increasing transaction costs, effectively "taking" a portion of their equity without compensation. Courts have scrutinized similar taxes as potential takings when they disproportionately burden private parties (e.g., Koontz v. St. Johns River Water Management District, 570 U.S. 595 (2013), which extended takings doctrine to monetary exactions). SB 6294 lacks mechanisms to ensure that taxed individuals benefit proportionally, violating the nexus and rough proportionality requirements under takings law.
• Property Tax Levy Expansions (Parts VI and VII):
• Amendments to RCW 71.20.110, 84.52.043, and 84.55.050 mandate or allow higher property tax levies for veterans' assistance, mental health services, and other purposes, with the ability to exceed levy limitations for up to 10 years (extended from 6 years). This shifts levies from optional to mandatory in some cases (e.g., a fixed 2.5 cents per $1,000 of assessed value for mental health/developmental disabilities) and prioritizes them in the tax hierarchy, potentially crowding out other essential services. Property owners face increased annual burdens, which can lead to forced sales or foreclosures if taxes become unaffordable— a de facto taking. The bill's proration scheme (RCW 84.52.010) further disadvantages property owners by reducing other junior district levies only after protecting these new ones, infringing on owners' right to predictable and fair taxation.
• Utility and Sales Taxes (Parts III, IV, V, and VIII):
• New utility taxes (up to 3% on services like electricity and water) and sales/use taxes (e.g., 0.01% for children/family services, up to 0.1% for housing) indirectly burden property rights by increasing the cost of maintaining and owning homes. For instance, utility taxes must be added to consumer bills, raising living expenses for homeowners.
• The rental car sales tax expansion (RCW 82.14.049) diverts funds to "criminal justice purposes," further diluting property tax dollars. These cumulative taxes erode the economic value of property ownership, constituting a regulatory taking under precedents like Penn Central Transportation Co. v. New York City (438 U.S. 104 (1978)), where excessive economic impact on property use was deemed unconstitutional.
• In sum, SB 6294 expands government power to extract value from private property for broad social goals, without sufficient justification or compensation, potentially inviting legal challenges under takings clauses.
• I. Impediments to Young, First-Time Homebuyers Washington already faces a severe housing affordability crisis, with median home prices exceeding $600,000 in many counties (e.g., King County) and young adults (ages 25-34) owning homes at rates 20% below the national average. SB 6294 exacerbates this by inflating transaction and ownership costs, pricing out young buyers who lack generational wealth or high incomes.
• Higher Transaction Costs via REET Increases: The doubled REET (up to 0.5%) adds thousands to closing costs. For a $500,000 home (below median in urban areas), this could mean an extra $2,500 tax—often borne by buyers in competitive markets.
• Young buyers, already stretched by down payments (typically 5-20% or $25,000-$100,000), face higher barriers to entry. The bill's focus on "affordable housing" ironically funds it through taxes that make market-rate homes less affordable, creating a regressive impact on millennials and Gen Z buyers who are disproportionately renters.
• Elevated Property Taxes Reducing Affordability: Extended levy lids (up to 10 years) and mandated levies will increase annual property taxes by hundreds or thousands per home. For example, the 2.5 cents/$1,000 mental health levy on a $500,000 property adds $125/year, compounding with inflation adjustments (tied to 101% or CPI). Lenders factor these into mortgage approvals, reducing borrowing power for young buyers with student debt or entry-level salaries. Higher taxes also discourage new construction, as developers pass costs to buyers, worsening supply shortages.
• Indirect Costs from Other Taxes: Utility taxes (up to 3%) and sales taxes (e.g., 0.1% for housing) raise monthly expenses, making homeownership less viable. Young families, targeted by Part IV's child services tax, ironically face higher costs for essentials like childcare and utilities, diverting savings from down payments. In counties like King or Pierce, where young buyers are migrating due to high costs, these taxes could accelerate out-migration, hollowing out the workforce.

Data from similar policies elsewhere (e.g., California's Proposition 10, which expanded rent controls but increased overall housing costs) shows that tax-funded housing programs often fail to benefit new buyers, instead subsidizing existing low-income residents while inflating prices for others. SB 6294 risks a similar outcome, prioritizing government programs over market-driven solutions like zoning reforms or incentives for private development.

III. Recommendations and Call to Action

SB 6294, whilch may be well-intentioned, prioritizes expansive government funding over individual rights and economic mobility. To address these flaws:

• Amend for Protections: Exempt first-time buyers from REET increases or cap taxes on entry-level homes. Require sunset clauses and performance audits for all new levies.
• Alternative Approaches: Fund social programs through voluntary bonds or efficiencies in existing budgets, not mandatory property taxes. Promote property rights by streamlining permitting to increase housing supply.
• Legal and Voter Scrutiny: If passed, this bill invites constitutional challenges; voters should demand referendums under RCW 84.55.050's election requirements.

Citizens' Alliance for Property Rights challenges SB 6294 as an overreach that undermines property rights and hinders the American Dream for young Washingtonians.

Contact your legislators to oppose this bill and advocate for policies that empower, rather than burden, homeowners and aspiring buyers. 800 562 2000 and politely ask the Legislative Information Center to register your comments with your district legislators!