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