Washington's Real Estate Excise Tax (REET): What Buyers Should Know
Washington taxes the sale of real estate itself — the Real Estate Excise Tax, or REET. As a buyer you usually won't write this check, but it shapes seller behavior, pricing, and what you'll net when you eventually sell. Ten minutes understanding it now saves confusion at the closing table.
How the graduated REET works
Since 2020 the state REET has been graduated, like income-tax brackets: a lower rate on the first portion of the sale price and higher rates on the portions above each threshold. The tiers (thresholds are adjusted periodically by the Department of Revenue) run from 1.1% on the first several hundred thousand dollars up to 3% on the portion above roughly $3 million.
On top of the state tax, nearly every King County city adds a local REET of 0.25%–0.50% of the full price. On a typical $800,000 Seattle-area sale, combined state and local REET lands somewhere around $13,000 — real money that comes out of the transaction.
Who pays it — and why buyers should still care
By custom and by statute, the seller pays REET in Washington. But the tax is a lien on the property until paid, and sellers price their homes knowing what they'll net after REET, agent compensation, and their share of closing costs. In negotiations — especially on higher-priced homes near a tier threshold — REET is quietly part of the math on both sides.
- If you buy from an out-of-state or for-sale-by-owner seller, confirm escrow is collecting and remitting REET — as the new owner you don't want a surprise lien.
- When you sell someday, budget REET into your net-proceeds estimate; it's often sellers' second-largest transaction cost.
What's exempt
Certain transfers avoid REET: gifts with no consideration, inheritance, transfers between spouses in divorce, and some transfers to/from revocable trusts. These have precise documentation requirements — a title or escrow officer will route you correctly, but never assume an exemption without confirming.
REET vs. property tax — don't confuse them
REET is a one-time tax on the transfer; property tax is the annual bill you'll pay as an owner. Washington has no state income tax, and transfer/excise and property taxes are a big part of how the state funds schools and local services — useful context for why both are comparatively visible here.
Official sources
This information is for education only — it is not financial, legal, or tax advice. Loan rates, program rules, and limits change; always verify current details with a licensed lender, your agent, and official sources before making decisions.