This bill amends existing Washington real estate excise tax law (amending RCW 82.45.010 and related uncodified sections) by restating and changing the statutory definition of "sale" for chapter purposes and by adding and revising a number of specific inclusions, exclusions, and procedural rules. It expands what counts as a sale to cover various conveyances, contracts, leases-with-option, transfers of improvements, and transfers or acquisitions of controlling interests in entities holding real property within any 36-month period. For transfers effected by option agreements the option execution date is deemed the transfer date for the limited purpose of the 36-month aggregation rule. Persons "acting in concert" must be aggregated for determining controlling interest transfers, and the unnamed department must adopt rules to identify when persons act in concert. The bill creates and clarifies many exclusions and conditional exemptions from the excise tax, including an exclusion for transfers of federally tax-credit-allocated low-income housing developments with a recapture exception and a sunset of July 1, 2035; a conditional exclusion for transfers of residential property by a legal representative of an adult with developmental disabilities to a defined "qualified entity" (with requirements including the legal representative not receiving consideration, a four-unit maximum, a 50-year continued-use requirement, DSHS review of safety/appropriateness, and a recapture mechanism whereby DSHS notifies the department if continued use is not met and REET becomes immediately due without penalties or interest); an exclusion for sales by nonprofit “affordable homeownership facilitators” to low-income households; and rules for transfers to qualifying grantees for low-income housing that require recorded covenants, specific timelines to place or qualify housing (existing housing within 1 year, substantial rehabilitation within 3 years, new development within 5 years), affidavit filings, and tax plus interest if timelines are not met. Beginning January 1, 2026 the bill also addresses sale of qualified space within affordable housing developments for exempt community purposes. The act imposes new administrative and reporting duties and time limits: the Washington State Housing Finance Commission must collect specified data and provide it to the Joint Legislative Audit and Review Committee (JLARC), JLARC must review the low-income housing tax preference in 2033 and annually review certain REET exemption usage and revenue, and the department must adopt rules on concerted action aggregation. The bill modifies the tax preference performance statement for prior law, and includes expirations: section 1 of the act expires January 1, 2030 and the low-income housing exclusion sunsets July 1, 2035. The extracted material does not specify which agency is the unnamed "department" in all provisions, and some text (notably portions of subsection (3)(t) and other uncodified amendments) is incomplete in the provided facts.

If enacted, the bill expands which property transfers and changes in control can be treated as real estate sales for tax purposes while creating several targeted exemptions and conditional reliefs aimed at low-income housing and nonprofit-supported living. In practice, nonprofit developers, housing authorities, qualifying grantees, and families transferring a home for supported living can avoid real estate excise tax if they meet new conditions: file affidavits, record covenants, meet strict timelines to put property into low‑income use, limit unit counts or incomes (generally 80% of county median), and, in some cases, commit to long-term continued use (for example, 50 years for supported living). The law requires data collection by the state housing finance commission and a JLARC review in 2033, Section 1 of the act expires January 1, 2030, and one low-income housing exclusion sunsets July 1, 2035. Those most affected will be nonprofit developers and qualifying grantees who gain potential tax savings but take on new administrative duties and legal risks: failing to meet covenants or timelines can trigger retroactive REET liability (the original transfer tax plus interest) or immediate tax due if DSHS finds a supported-living property no longer complies. State agencies (DSHS, the housing finance commission, JLARC and an unspecified “department” that receives notices and affidavits) will have increased responsibilities to certify compliance, collect data, and enforce consequences. The text provided leaves unclear which agency is the designated recipient of notices and some details of the supported-living transfer rules are incomplete.