The Washington real estate excise tax (REET) is a state tax on the sale or transfer of real property, charged at graduated rates from 1.1% to 3.0% of the selling price, with additional local rates layered on top depending on where the property sits.1Washington State Legislature. RCW 82.45.060 The seller owes it. It’s due within 30 days of closing, and even transfers that qualify for an exemption still require an affidavit filed with the county.
How Much You’ll Owe
Washington’s state rate is tiered like federal income tax brackets. Each slice of the selling price is taxed at the rate for its tier, not the whole price at the top rate:1Washington State Legislature. RCW 82.45.060
- 1.1% on the portion up to $500,000
- 1.28% on the portion between $500,000 and $1,500,000
- 2.75% on the portion between $1,500,000 and $3,000,000
- 3.0% on the portion above $3,000,000
Take a $2,000,000 sale. The first $500,000 is taxed at 1.1% ($5,500), the next $1,000,000 at 1.28% ($12,800), and the final $500,000 at 2.75% ($13,750). Total state REET: $32,050. The Department of Revenue adjusts these brackets every four years, so verify the current thresholds through DOR before closing.
Local REET Added to the State Rate
Most cities and counties impose their own REET on top. The two common local pieces, often called REET 1 and REET 2, are each 0.25%. A jurisdiction that plans fully under the Growth Management Act can impose both, adding up to 0.50%. Some counties have additional authority to levy REET for conservation areas or affordable housing. Because the local rate depends on where the property is, the combined percentage varies noticeably between jurisdictions. Your escrow company or the county treasurer’s office can confirm the total for a specific address.
Who Legally Pays
The seller owes the tax. Washington law makes REET the seller’s debt, enforceable by the Department of Revenue either through a lawsuit against the seller or through foreclosure on the property itself, and using one path doesn’t foreclose the other.2Washington State Legislature. RCW 82.45.080
The buyer isn’t off the hook entirely. If the seller doesn’t pay, the buyer becomes liable. As a practical matter this rarely surfaces, because the county won’t record the deed until REET is paid, and escrow pulls the money from the seller’s proceeds at closing. In deals structured without escrow, confirm in the purchase agreement that the seller is covering it.
What Counts as a Taxable Transfer
REET reaches any conveyance, assignment, quitclaim, or transfer of title to real property or an interest in it for valuable consideration. That covers single-family homes, commercial buildings, vacant land, and multi-family complexes. It also covers a lease with a purchase option, where the buyer takes possession while the seller keeps title as security.3Washington State Legislature. RCW 82.45.010 – Sale Defined
Selling a company that owns Washington real estate isn’t a workaround. If one person, or a group acting together, acquires 50% or more of a corporation, partnership, trust, or other entity within 36 months, the acquisition is treated as a sale of the underlying real property, and the tax is calculated on that property’s value at the time of transfer.4Legal Information Institute. WAC 458-61A-101 – Taxability of the Transfer or Acquisition of Controlling Interest
Filing the Affidavit and Paying
Every transfer requires a completed Real Estate Excise Tax Affidavit, taxable or not. Use the version of the form that matches your date of sale, available from the Department of Revenue.5Washington Department of Revenue. Real Estate Excise Tax Forms The wrong form gets rejected.
The affidavit collects:
- Full legal names, mailing addresses, and phone numbers for the seller (grantor) and buyer (grantee), plus the percentage of ownership the buyer is acquiring
- All parcel account numbers assigned by the county assessor, the assessed value, street address, and the full legal description exactly as it appears on the deed
- Whether the property has any tax exemption or deferral, whether it’s classified as agricultural, timber, or forest land, and whether it carries a historical designation
- Gross selling price, deductions for any personal property included, the exemption code if claiming one, and the resulting taxable selling price
Names must match the deed exactly. Nicknames or abbreviations bounce the form back. Both grantor and grantee, or their authorized agents, sign.
For deed transfers, file the affidavit and payment with the county treasurer where the property is located.6Legal Information Institute. WAC 458-61A-100 – Real Estate Excise Tax Overview Most offices accept in-person and mailed submissions. Controlling interest transfers can be filed electronically through the DOR’s My DOR portal.7Washington Department of Revenue. Real Estate Excise Tax
Payment is due within 30 days of the sale date. Interest and penalties on late payments add up quickly. Once the treasurer processes payment and verifies the affidavit, you receive a stamped deed, which then goes to the county auditor for recording.
Transfers That Are Exempt
Washington recognizes a long list of exempt transfers under WAC 458-61A-200 through 458-61A-219.8Washington State Legislature. WAC Chapter 458-61A – Real Estate Excise Tax Even when a transfer qualifies, you still file the affidavit and cite the specific exemption code. No affidavit, no recording.
Gifts
A genuine gift of real property owes no REET, but “genuine” means zero consideration flowing back to the giver. If the recipient takes over the mortgage or any other debt on the property, that assumed debt is consideration, and REET applies to the debt amount. You can gift the equity above the debt without tax; the debt portion still gets taxed.9Washington State Legislature. WAC 458-61A-201 – Gifts This detail catches people out more than any other.
Divorce and Legal Separation
Transfers between spouses or state-registered domestic partners under a settlement agreement from a divorce, legal separation, or decree of invalidity are exempt. The exemption doesn’t cover transfers to third parties, even when the divorce decree orders a sale. It doesn’t cover transfers between former spouses that weren’t in the original settlement. And it requires a legal marriage or state-registered domestic partnership: unmarried couples separating property don’t qualify.10Washington Department of Revenue. Real Estate Excise Tax Exemptions Commonly Used
Inheritance and Trusts
Property passing through a will or by inheritance is exempt under WAC 458-61A-202. Transfers into and out of certain irrevocable trusts qualify under WAC 458-61A-210, and some changes in identity or form involving family entities qualify under WAC 458-61A-211.8Washington State Legislature. WAC Chapter 458-61A – Real Estate Excise Tax
Other Exemptions on the List
Government transfers, condemnation proceedings, transfers in bankruptcy, foreclosures and deeds in lieu of foreclosure, rescission of a sale, tax-deferred exchanges under IRS Section 1031, and transfers to nominees are all covered. There are carve-outs for low-income housing and housing for developmentally disabled individuals.8Washington State Legislature. WAC Chapter 458-61A – Real Estate Excise Tax Property transferred under a confirmed Chapter 11 reorganization plan is also shielded from state and local transfer taxes by federal law.11Office of the Law Revision Counsel. 11 U.S. Code 1146 – Special Tax Provisions
How REET Affects Your Federal Taxes
REET has consequences on your federal return whichever side of the deal you’re on.
Buyers who pay transfer taxes at closing can add that amount to their cost basis in the property. IRS Publication 551 lists transfer taxes as a settlement cost that increases basis.12Internal Revenue Service. Publication 551 (12/2025), Basis of Assets Higher basis means less taxable gain when you sell later, so keep the closing statement.
Sellers can’t deduct REET as a standalone expense. The IRS treats it as a selling expense that reduces the amount realized on the sale, which shrinks the capital gain calculation from a different line.13Internal Revenue Service. Publication 523 (2025), Selling Your Home For homeowners using the Section 121 exclusion ($250,000 single, $500,000 married filing jointly), REET as a selling expense only matters if your gain exceeds those thresholds.