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Graduated real estate excise tax rates range from 0.75% to 2.5%

Description

This proposal creates graduated state real estate excise tax (REET) rates of:

  • three-quarters percent (0.75) if the selling price is less than $250,000,
  • 1.28 percent if the selling price is at least $250,000 but less than $1 million,
  • 2 percent if the selling price is at least $1 million but less than $5 million, and
  • 2.5 percent if the selling price is $5 million or more.

The increase in general fund revenues from this proposal will be transferred to the motor vehicle account.

This proposal is effective July 1, 2019.

Current law

Individuals, corporations, and other entities owe real estate excise tax (REET) on their sales of real property, unless the sale qualifies for an exemption from the tax. Taxable sales include transfers of ownership in real property and in controlling interests in entities that own real property in Washington. Real property includes any interest in land or anything attached to land. The state tax rate is 1.28 percent. Local jurisdictions may add additional local rates. The combined state and local rate in most areas is 1.78 percent.

Revenue impact

See how this proposal will impact the state general fund below:

 

FY 2020

FY 2021

FY 2022

FY 2023

Real Estate Excise Tax

$189,600,000

$212,400,000

$215,700,000

$221,100,000