The real estate market in Kirkland has taken a major turn and a restoration of property owners’ rights could help put it back on the right track. For example, until 1992 it was non-taxable to gift a home that you owned to a next-of-kin other than your spouse, or simply to a dearly beloved in this state. The “consideration” was simply that of “love and affection.” That year the new legislature and governor in Olympia decided to tax the outstanding balance on your mortgage if you chose to gift a residence to your, say step-daughter, or in today’s world possibly to a civil union partner, as they decided that you couldn’t just gift your property for love and affection to anyone whom you loved and had great affection for. Sorry, but you no longer could exercise the right. As an upshot, people who wished to gift a home to, for example, a daughter and son-in-law, or a domestic partner in current usage, or to a brother or sister are compelled to pay tax not on the little equity that they owned, but instead on the big mortgage balance that they owed.

Now, we don’t have an income tax in Washington State, so if you think about it this is a stealth income tax as though you are being taxed by Olympia on the debt forgiven when your loved one takes over your title. Who did they think they are, the IRS? But since we don’t have, and shouldn’t have, an income tax this has been a great way to do a left-handed, around-the-back-pocket income tax when the ordinary folks have been distracted by other things in their life, such as the price of gas, groceries and college tuition. Distracted that is until they attempt to deed a nice home to someone they love and come to find out that Olympia has its hand out when it shouldn’t really.

But, it’s a great way to make an even a bigger tax bite as most people don’t have much equity in their property who are paying on a mortgage. Giving back the exemption to the homeowners of Washington would be a great way to restore a property right that was surreptitiously taken from them back when they weren’t paying close attention to an important property right such as this. The local residential real estate market and just ordinary citizens could use more individual freedom in this regard.

Miles F. Holden, Kirkland