HB 1168 and its companion SB 5025 are both alive but have been amended in committee to take a different approach. Both original versions of the bills exempted materials and services associated with “self-help housing” from sales tax, and the sale of the home from the real estate excise tax (REET). “Self-help housing” is most commonly understood as the Habitat for Humanity model, where a low-income home buyer participates in the construction of their home with a nonprofit agency.

Now, as amended in committee, each bill does one or the other.

HB 1168 exempts the sale of self-help housing by an affordable homeownership facilitator to a low-income household from REET. The REET exemption expires January 1, 2030. The sales and use tax exemption is removed. Proponents testified that this bill will have minimal fiscal impact to the state, but allow 40 low-income self-help housing developers, who are producing over 150 housing units a year, to increase production by 15 to 25 percent.

SB 5025 provides a sales and use tax exemption on eligible purchases related to self-help housing. The REET exemption is removed. The bill also directs the Joint Legislative Audit and Review Committee (JLARC) to evaluate two additional metrics to evaluate the effectiveness of the tax preference in achieving the specific public policy objective provided in the tax preference performance statement. Proponents testified that the fiscal impact of this bill is minimal for both the state and local governments, and would enable more affordable units to be developed more quickly.

Both bills are in Rules Committee.