State Real Estate Excise Tax (REET) Increases Will Impact Rental Investors
While many homeowners are set to benefit from legislation which revises how excise taxes are charged for real estate transactions, the new, graduated rates will actually bring in millions more in revenue to the state due to their impacts on commercial and rental property. Washington’s current excise tax is a flat 1.28% everywhere in the state. On January 1, state excise tax moves to the following scale:
- 1.10% on the first $500,000 of sales price
- 1.28% between $500,000 and $1,500,000 of sales price
- 2.75% between $1,500,000 and $3,000,000 of sales price
- 3.00% over $3,000,000 of sales price
A ballot initiative which would repeal the REET tax increases, and other tax increases enacted by the legislature in 2019, is currently out in the field and gathering signatures. Initiative 1648 would also require that new taxes enacted by the legislature face term limits unless ratified by the voters.