New Washington Real Estate Excise Tax and Impact on Home Sale/Purchase
The Washington State Legislature is changing the way real estate excise taxes (REET) are calculated. This change may affect the amount of excise tax you pay, depending on the sale price of your property. Currently, the state excise tax is 1.28%. Local municipalities add their excise tax on top of the state tax, with most cities in our area adding 0.5%, to get to a total of 1.78%.
Effective January 1, 2020, Washington state will begin calculating real estate excise taxes based on a tiered system. For sales below $500,000, there will be a reduction in state tax rates to 1.1% (current: 1.28%). For sales between $500,000-$1.5M, the state tax rate will remain unchanged at 1.28%. For sales above $1.5M, state tax rates will increase significantly to 2.75% (for sale price between $1.5M-$3M) and to 3.0% (for sale price above $3M).
The table below summarizes the new Real Estate Tax Rates, including the 0.5% municipality tax.
If you have any questions or need more information about the new REET and how it will impact your home sale/purchase, please do not hesitate to reach out!