Taxes on Selling a House in Washington State
When you sell a home in Washington State, you can expect to pay some sizable transfer taxes.
The main thing to consider is the state’s real estate excise tax (REET). Aside from that, there are lesser local transfer taxes, as well as the standard federal tax on capital gains you make from the home sale.
With the help of a top Washington State real estate agent, we’ll take a look at each of these tax liabilities and how they add up when you sell your Washington home.
Disclaimer: This post is for educational purposes and is not intended to be construed as tax advice. HomeLight always encourages you to reach out to an advisor.
What is Washington’s real estate excise tax?
This is the primary tax you’ll have to pay when you sell your Washington home. It’s based on the entire sales price (not just the profit), and the percentage you owe graduates as the sales price reaches specific thresholds.
Effective Jan. 1, 2023, the selling price thresholds for the state portion of REET will be as follows:
For the portion of the selling price that is:
Real Estate Excise Tax Rate
Less than or equal to $525,000
1.1%
Greater than $525,000 and less than or equal to $1,525,000
1.28%
Greater than $1,525,000 and less than or equal to $3,025,000
2.75%
Greater than $3,025,000
3.0%
Most counties and local governments in the state also charge their own smaller REETs on top of the state’s rate. In most jurisdictions, this amounts to an additional 0.25% or 0.50% of each selling price threshold.
John Dirgo Deweese, an Ocean Shores, Washington, real estate agent with more than 20 years of experience, says home sellers are commonly caught off guard by these taxes.
“It’s really something that only occurs for most people with the sale of a house or something like that,” Deweese explains. “It’s a complete surprise to people when it comes up.”
For this reason, he usually breaks the news to his clients at the beginning of the selling process and explains that REETs are unavoidable.
“Absolutely everyone pays this on every real estate sale,” he says. “There’s no exemptions, exclusions, nothing.”
