Excise Tax Changes

     The Washington State Legislature has made changes to the Real Estate Excise Tax (REET) that go into effect on January 1st, 2020.  Currently, the State collects 1.28% of the sale price of real property that funds several initiatives in the State, with the majority of the money going to the States’ General Fund.  King County also collects 0.50% on the transfer of real property.

     The new legislation is a progressive tax such that lower sale priced home will contribute a lower percentage to the State and higher priced homes will contribute a higher percentage to the State.  The Excise Tax when the sale price of a home is below $500,000 will be1.1%, It will increase to 1.28% when the sale price of a home is between $500,000 and $1,500,000, 2.75% when the sale price of a home is between $1,500,000 and $3,000,000 and, 3.00% for homes that sell for greater than $3,000,000.  The result in the Seattle Area will be minimal because most homes sell for between the $500,000 and $1,500,000.  Rural Washington homes will benefit the most because homes generally sell for less than $500,000. 

     Cities and Counties will be allowed to charge an additional 0.25% to 0.50% Excise Tax to help fund homeless projects and provide funds for affordable housing.  Municipalities must gain permission for these additional taxes through voter approval.

If you have comments or questions about this article, please email me at smeyers@kw.com.

If you would like to read other real estate articles I’ve written, go to my web site at www.ourseattlehome.com and click on the “Articles I’ve Written” tab.

Steve Meyers is a Managing Broker at Keller Williams Realty in Seattle, Washington.  He can be reached at (206) 972-3328 or smeyers@kw.com.

Agent

Steven Meyers, Owner/Managing Broker

Steven Meyers, Owner/Managing Broker

Phone(206) 972-3328