Change to the Washington Real Estate Excise Tax

Per E. Oscarsson, Edmonds Lawyer

Transfers of real estate in Washington are subject to state and local real estate excise tax on the consideration given for the transfer of that real estate, unless an exemption from the tax applies. Prior to 2020, the state portion of the tax was 1.28% of the value of the consideration given for the transfer. The local portion of the tax was a smaller percentage and varied from 0% to 0.5% of the value of the consideration given depending upon the tax rate adopted by the local jurisdiction within that range permitted by state law.

Effective in 2020, the state portion of the real estate excise tax was changed to a graduated rate. The first $500,000 in value of consideration was taxed at 1.1%. The portion of value that exceeded $500,000, but did not exceed $1.5 million, was taxed at 1.28%. The portion of value that exceeded $1.5 million, but was less than $3 million, was taxed at 2.75%. The portion of value that exceeded $3 million was taxed at 3%.  Transfers of timberland and agricultural land continued to be taxed at the 1.28% rate. The thresholds for the applicable percentages were subject to adjustment in July 2022 and every four years thereafter.

In 2022, to apply beginning in January 2023, the threshold for the 1.1% tax rate was increased from $500,000 to $525,000. By statute, each of the remaining three thresholds was increased by the same dollar amount. As a result, the value of consideration that exceeds $525,000, but does not exceed $1,525,000 is taxed at 1.28%, the value of consideration that exceeds $1,525,000, but does not exceed $3,025,000, is taxed at 2.75%, and the value of consideration that exceeds $3,025,000 is taxed at 3%.

If you need assistance with business or real estate matters, contact Per Oscarsson or one of the other attorneys in Beresford Booth’s Business and Real Estate Group.

To learn more about Change to the Washington Real Estate Excise Tax, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.

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