Purchasing a home in Washington State comes with various costs and expenses, one of which is taxes. If you're planning to buy a home in the state, it's important to understand the different taxes that you may be required to pay and how they are calculated. In this guide, we will provide an overview of the taxes that you may need to pay when buying a home in Washington State.
The first type of tax that you may be required to pay when buying a home in Washington State is the Real Estate Excise Tax or REET. This tax is levied on the sale of real property in the state and is typically paid by the seller. However, in some cases, the buyer may be required to pay a portion of the tax if it is not fully paid by the seller. The real estate excise tax rate in Washington State is between 1.1% and 3.0% of the sales price of the property. In 2021 the average home price in Washington State was $560,400. This would place it into the 1.28% bracket, meaning that roughly $7,173 would be due to the state and split to fund a variety of local services.
Real Estate Excise Tax (REET) is typically paid by the seller, but in some cases, the buyer may be responsible for paying a portion of the tax if it is not fully paid by the seller. The REET is collected by the county in which the property is located and is due at the time of the sale. If the REET is not paid, the county may place a lien on the property. It is important to be aware of the REET and ensure that it is paid in a timely manner to avoid any potential issues.
The REET is used to fund a variety of local government services, including schools, roads, and public safety. It is an important source of revenue for many localities in Washington, and helps to ensure that these essential services are adequately funded.
In addition to the real estate excise tax, you may also be required to pay property taxes on your new home. Property taxes in Washington State are calculated based on the value of the property and are levied by local governments. The property tax rate varies depending on the location of the property, so it's important to check with your local government to determine the exact amount you will be required to pay.
It's also important to note that there may be additional taxes and fees associated with buying a home in Washington State, such as title insurance, closing costs, and appraisal fees. These costs can vary depending on the specific property you are purchasing and the terms of your mortgage loan.
Overall, it's important to do your research and be aware of the various taxes and fees that may be required when buying a home in Washington State. Understanding these costs can help you budget and plan for the expenses associated with purchasing a home in the state. It may also be helpful to work with a real estate agent or lawyer who can provide guidance and assistance with the home buying process.
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