Effective January 1, 2020, the real estate excise tax (REET) will be imposed at a graduated rate, rather than a flat tax rate of 1.28% for all real estate transactions. The state-level tax will be:
- 1.1% on the first $500,000 of the selling price,
- 1.28% of the amount in excess of $500,000 but less than $1.5 million,
- 2.75% of the amount between $1.5 million and $3 million, and
- 3.0% on the amount in excess of $3 million.
Local REET rates (most commonly 0.5%) are added to the state rate. The new combined state and local REET rates for Seattle, Tacoma, Spokane, Vancouver, Bellevue, and most of urban and suburban Washington will be:
- 1.6% on the first $500,000 of the selling price,
- 1.78% of the amount in excess of $500,000 but less than $1.5 million,
- 3.25% of the amount between $1.5 million and $3 million, and
- 3.5% on the amount in excess of $3 million.
Sell Before January 2020 to Avoid the Increase
If you were considering selling your high-end home, now is the time to do so to avoid paying the much higher rate. Here’s the difference:
- $500,000 Selling Price = $6,400 old rate. $8,000 new rate. A $1,600 increase.
- $1,000,000 Selling Price = $12,800 old rate. $17,800 new rate. A $5,000 increase.
- $2,000,000 Selling Price = $25,600 old rate. $65,000 new rate. A $39,400 increase.
- $3,000,000 Selling Price = $38,400 old rate. $105,000 new rate. A $66,600 increase.
Be sure to consider selling with me, a 1% broker, to save even more. For all my listings, I do not charge to work with your buyers, saving you an additional 2.5% to 3%. PLUS, my rate is just 1.5% when I place an offer on your next home, making your offer stronger without having to pay for it. Contact me now.
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