New Graduated Real Estate Excise Tax Takes Effect

In 2019, the Washington State Legislature passed an update to the Real Estate Excise Tax (REET) which modified the tax from a flat rate to a graduated rate based on the value of property sold. The new REET law took effect January 1st with this new rate schedule:

        $0 to $500,000: 1.10%

        $500,000.01 to $1,500,000: 1.28%

        $1,500,000.01 to $3,000,000: 2.75%

        $3,000,000+: 3.0%

With previous state REET of 1.28%, this change lowered REET by 0.18% for transactions $500,000 or less, while maintaining the rate for mid-level transactions, and significantly raising the rate for transactions above $1,500,000.

Local REET Taxes Unchanged
It should be noted, this only effected the state portion of the REET. The local REET rates were left unchanged. These local rates are typically the maximum (0.5%) allowed by State law for cities within King, Snohomish and Pierce counties. Nonetheless, in order to calculate the total REET bill, you'll need to add 0.5% to the above rates if you live in the tri-county area.

New Excise Tax Calculator

Want to see this new system in practice, here's a Google Sheets calculator tool showing your estimated excise tax under the new system as well comparing it to the old system. (May require a Google account to access... if you'd like an Excel sheet just email us and we'll send you one.) Here's a screenshot example: