TIME TO SELL? New real estate excise tax and how it might affect your home sale/purchase.
In 2019, the Washington State Legislature enacted Senate Bill 5998 which changes the way that real estate excise taxes (REET) are calculated. This change may affect the amount of excise tax you pay depending on the sale price of your property.
12/31/2019
$100,000 3.5% $80,000
$60,000
Currently, the state excise tax is 1.28 percent. Local municipalities add their excise tax on top of the state tax, with most cities in our area adding 0.50 percent, to total 1.78 percent. Effective January 1, 2020, Washington State will begin calculating real estate excise taxes based upon a tier system:
3.25% $40,000
$20,000
1.78% 1.6%
$0
$450,000
$890,000
$1,900,000
$3,500,000
NEW REAL ESTATE EXCISE TAX RATES*
Municipality tax of 0.5% included below. Rates take effect January 1, 2020
1.6%
up to and including $500,000
1.78%
between $500,001–$1,500,000
3.25%
between $1,500,001–$3,000,000
3.5%
between $3,000,001 and above
*Municipalities of Darrington, Eatonville, Skykomish and Wilenson have a lower tax rate of 0.25 percent.
1.6% $0
1.78% $0.5M
$1.0M
3.25% $1.5M
$2.0M
$2.5M
$3.0M
3.5% $3.5M
$4.0M +
Sales Price
$300,000 $350,000 $400,000 $450,000 $500,000 $550,000 $600,000 $650,000 $700,000 $750,000 $800,000 $850,000 $900,000 $950,000 $1,000,000 $1,050,000 $1,100,000 $1,150,000 $1,200,000 $1,250,000 $1,300,000 $1,350,000 $1,400,000 $1,450,000 $1,500,000 $1,550,000 $1,600,000 $1,650,000 $1,700,000 $1,750,000 $1,800,000 $1,850,000 $1,900,000 $1,950,000 $2,000,000 $2,100,000 $2,200,000 $2,300,000 $2,400,000 $2,500,000 $2,600,000 $2,700,000 $2,800,000 $2,900,000 $3,000,000 $3,100,000 $3,200,000 $3,300,000 $3,400,000 $3,500,000 $3,600,000 $3,700,000 $3,800,000 $3,900,000 $4,000,000 $4,500,000 $5,000,000 $5,500,000 $6,000,000 $6,500,000 $7,000,000 $7,500,000 $8,000,000 $8,500,000 $9,000,000 $9,500,000 $10,000,000
Below $500K @1.6%
$4,800 $5,600 $6,400 $7,200 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
$500K-1.5M @1.78%
$0 $0 $0 $0 $0 $890 $1,780 $2,670 $3,560 $4,450 $5,340 $6,230 $7,120 $8,010 $8,900 $9,790 $10,680 $11,570 $12,460 $13,350 $14,240 $15,130 $16,020 $16,910 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800 $17,800
$1.5M-3M @3.25%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,625 $3,250 $4,875 $6,500 $8,125 $9,750 $11,375 $13,000 $14,625 $16,250 $19,500 $22,750 $26,000 $29,250 $32,500 $35,750 $39,000 $42,250 $45,500 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750 $48,750
Above $3M @3.5%
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,500 $7,000 $10,500 $14,000 $17,500 $21,000 $24,500 $28,000 $31,500 $35,000 $52,500 $70,000 $87,500 $105,000 $122,500 $140,000 $157,500 $175,000 $192,500 $210,000 $227,500 $245,000
New Rate 1/1/2020
$4,800 $5,600 $6,400 $7,200 $8,000 $8,890 $9,780 $10,670 $11,560 $12,450 $13,340 $14,230 $15,120 $16,010 $16,900 $17,790 $18,680 $19,570 $20,460 $21,350 $22,240 $23,130 $24,020 $24,910 $25,800 $27,425 $29,050 $30,675 $32,300 $33,925 $35,550 $37,175 $38,800 $40,425 $42,050 $45,300 $48,550 $51,800 $55,050 $58,300 $61,550 $64,800 $68,050 $71,300 $74,550 $78,050 $81,550 $85,050 $88,550 $92,050 $95,550 $99,050 $102,550 $106,050 $109,550 $127,050 $144,550 $162,050 $179,550 $197,050 $214,550 $232,050 $249,550 $267,050 $284,550 $302,050 $319,550
Current 1.78% Rate
$5,340 $6,230 $7,120 $8,010 $8,900 $9,790 $10,680 $11,570 $12,460 $13,350 $14,240 $15,130 $16,020 $16,910 $17,800 $18,690 $19,580 $20,470 $21,360 $22,250 $23,140 $24,030 $24,920 $25,810 $26,700 $27,590 $28,480 $29,370 $30,260 $31,150 $32,040 $32,930 $33,820 $34,710 $35,600 $37,380 $39,160 $40,940 $42,720 $44,500 $46,280 $48,060 $49,840 $51,620 $53,400 $55,180 $56,960 $58,740 $60,520 $62,300 $64,080 $65,860 $67,640 $69,420 $71,200 $80,100 $89,000 $97,900 $106,800 $115,700 $124,600 $133,500 $142,400 $151,300 $160,200 $169,100 $178,000
Difference
-$540 -$630 -$720 -$810 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$900 -$165 $570 $1,305 $2,040 $2,775 $3,510 $4,245 $4,980 $5,715 $6,450 $7,920 $9,390 $10,860 $12,330 $13,800 $15,270 $16,740 $18,210 $19,680 $21,150 $22,870 $24,590 $26,310 $28,030 $29,750 $31,470 $33,190 $34,910 $36,630 $38,350 $46,950 $55,550 $64,150 $72,750 $81,350 $89,950 $98,550 $107,150 $115,750 $124,350 $132,950 $141,550
If you are thinking of buying or selling soon, now would be a great time to contact me and find out how this new legislation will affect your transaction. Whether buying or selling, knowing how this excise tax will affect you could save you thousands or tens of thousands of dollars.