The Real Estate Excise Tax (REET) is a tax that is imposed on the sale of real property in the state of Washington. The tax is typically paid by the seller of the property, although in some cases it may be paid by the buyer.
The REET is a percentage of the sale price of the property, and the exact rate varies depending on the location of the property and the type of sale. For most residential properties, the REET is between 1.1% and 3% of the sale price. The rate is tiered so more expensive properties have a higher tax rate.
As of January 1, 2023, the selling price thresholds and tax rates are as follows:
Less than or equal to $525,000 is 1.1%
Greater than $525,000 and less than or equal to $1,525,000 is 1.28%
Greater than $1,525,00 and less than or equal to $3,025,000 is 2.75%
Greater than $3,025,000 is 3.0%
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.
When a property is sold, the seller is responsible for paying the REET. The tax is typically collected by the county in which the property is located, and is due at the time the sale is completed. If the seller fails to pay the REET, the buyer may be required to pay the tax instead. Failure to pay could result in a lien on the property regardless of who is responsible for the tax.
It's worth noting that the REET is just one of many taxes and fees that may be imposed on the sale of real property in Washington. In addition to the REET, there may also be other local taxes, such as county and city transfer taxes, as well as state and federal taxes. If you are making a profit on your home and you have not lived there for more than two of the last five years, you may also be subject to a capital gains tax.