An excise tax is a tax on the transfer of ownership from the seller to the buyer paid at closing. It’s paid by the seller to the escrow agent or the attorney responsible for closing the deal, who then pays it to the government. Not exclusive to real estate, excise taxes are paid on most goods produced within a country.
What are closing costs in Washington State?
Home buyer closing costs in Washington State range from about 1% to 5% of the purchase price, on average. But there are many variables that can affect the total amount you pay at closing. You should receive a detailed “Loan Estimate” document when you apply for a mortgage loan.
Is there sales tax on a home purchase in Washington State?
Washington state levies a real estate excise tax (REET) on all property sales. This state tax rate is 1.28% of a property’s full selling price.
What is the real estate excise tax in Washington State?
Beginning next year, the Washington real estate excise tax (REET) will convert to a tiered rate structure from the current flat-rate structure, resulting in a big increase in the rate for more valuable properties.
Do you have to pay real estate excise tax?
Real estate excise tax (REET) is a tax on the sale of real property. All sales of real property in the state are subject to REET unless a specific exemption is claimed. The seller of the property typically pays the real estate excise tax, although the buyer is liable for the tax if it is not paid.
When do you pay real estate transfer tax in Washington State?
They vary from state to state, and in most states, including Washington, the home seller will pay the transfer tax. This is usually done when the seller transfers legal deeds, certificates, and titles to the property that is being sold. Washington’s transactional tax on real estate is formally known as the Real Estate Excise Tax, or REET.
What are exemptions for real estate in Washington State?
Real property transferred to heirs for inheritance purposes is exempt with valid supporting documentation. Required documents may include a death certificate, community property agreement or copies of recorded trusts or probated wills.
