If you are considering selling your house or have interest in buying a house, you will need to know about the excise tax increase beginning January 1, 2020. The Washington Legislature has proposed to increase the excise tax in efforts to raise revenue and make Washington’s tax system more progressive.
Currently, the state tax rate is a flat rate of 1.28 percent. Local jurisdictions may add additional local rates. The combined state and local rate in most areas is 1.78 percent.
The new increase changes the rate from the flat rate to a graduated rate structure, which is:
- Selling price less than $500,000: 1.1%
- Selling price greater than $500,000 and less than or equal to $1.5 million: 1.28%
- Selling price greater than $1.5 million and less than or equal to $3 million: 2.75%
- Selling price greater than $3 million: 3%
These thresholds may be adjusted again in 2022 and every four years after that. With any tax increase, comes feelings of uncertain. The good news with this new tax increase, the tax has decreased for those with smaller real estate transactions.
If you have questions about the tax increase or questions about real estate in general, please call our office today at CALL and schedule a free consultation.