What is the Tax on Real Estate Sales in Washington State?
When it comes to real estate transactions, understanding the tax implications is crucial. In Washington State, there are specific taxes imposed on the sale of real estate. This article aims to provide an expert, informative, and easy-to-understand overview of the tax on real estate sales in Washington State.
Unlike some other states, Washington does not levy a sales tax on real estate transactions. This means that buyers and sellers do not have to worry about paying a percentage of the purchase price as a sales tax.
In Washington State, the tax on real estate sales is known as the excise tax. It is imposed on the sale of real property and is calculated based on the selling price. The excise tax rate in Washington State is determined by county, and it can vary from 1.28% to 3% of the selling price.
For example, if you sell a property in King County for $500,000, the excise tax would amount to $6,400 (1.28% of $500,000). However, if you sell a property in San Juan County for the same price, the excise tax would be $15,000 (3% of $
Graduated REET Structure effective Jan. 1, 2023 for the state portion of REET
|Sale price thresholds||Tax rate|
|$525,000 or less||1.10%|
|$525,000.01 - $1,525,000||1.28%|
|$1,525,000.01 - $3,025,000||2.75%|
|$3,025,000.01 or more||3%|
Do I have to pay taxes on gains from selling my house in Washington state?
Q: Does the tax apply to sales of real estate? A: The capital gains tax does not apply to sales of real estate. This exemption applies whether a) a Washington individual taxpayer recognizes a gain on real estate held as an individual, or b) if the real estate gain was passed through from an entity.
Does Washington state have capital gains tax on property sale?
Gains from the sale of real estate are exempt from the Washington capital gains tax. Long-term gains and losses from the sale of interests in a privately held entity are exempt to the extent the gain is directly attributable to the real estate owned directly by such an entity.
How are real estate taxes calculated in Washington state?
Washington State's Constitution limits the regular (non- voted) combined property tax rate that applies to an individual's property to 1% of market value ($10 per $1,000). Voter approved special levies, such as special levies for schools, are in addition to this amount.
Does selling a house count as taxable income?
If you owned and lived in the home for a total of two of the five years before the sale, then up to $250,000 of profit is tax-free (or up to $500,000 if you are married and file a joint return). If your profit exceeds the $250,000 or $500,000 limit, the excess is typically reported as a capital gain on Schedule D.
How to avoid capital gains tax on house sale in Washington State?
A: The capital gains tax does not apply to sales of real estate. This exemption applies whether a) a Washington individual taxpayer recognizes a gain on real estate held as an individual, or b) if the real estate gain was passed through from an entity.
How do I appeal the excise tax in Washington State?
You may appeal an excise tax assessment from the Department of Revenue, or a denial of a request for a refund of excise taxes paid, to the State Board under RCW 82.03. 190. This statute requires you to complete the Department's administrative review process before you appeal to the State Board.
|Are property taxes based on sale price Washington State?
||All real and personal property in Washington is subject to property tax based on 100 percent of its true and fair market value unless the law provides a specific exemption.
|How do you calculate sales tax in Washington state?
||Washington's retail sales tax is made up of the state rate (6.5 percent) and the local sale tax rate. Local rates vary depending on the location. The sales tax rate for items delivered to the customer at the store location (over the counter sales) is based on the store location.
|How much is capital gains tax on real estate in Washington?
||Do I owe capital gains tax when I sell real estate? No. Washington's capital gains tax does not apply to the sale or exchange of real estate.
|At what age do you stop paying property taxes in Washington state?
||61 years of age or older
At least 61 years of age or older. Retired from regular gainful employment due to a disability. Veteran of the armed forces of the United States receiving compensation from the United States Department of Veterans Affairs at one of the following: Combined service-connected evaluation rating of 80% or higher.