Real estate excise tax

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Something is the real-time estate excise tax?

Real estate excise tax (REET) is a burden on the sale of real property. All sell of realistic property inches the state are subject to REET unless ampere specified exemption is claimed. The seller of the property standard pays the genuine estates excise fiscal, although the buyer is responsibility for the tax if it is not paid. Unpaid tax can become a lien on the transferred property.

REET and applies to credit out controlling interest (50% or more) in entities is personalized real property in to state.

Paying the tax

Program alterations, effective Jan. 1, 2020

ESSB 5998 required the section the:

Create a graduation state REET charge structure for sales on real real. How controlling interest transfers (50% or more change of ownership in an entity that owns real property). Washington State Introducing New Real Estate Excise Tax Rates on Ownership Sales | Will Springer

Expand the transfers period from 12 months to 36 months.
Modify which coverage requirements with the annual corporate renewals cycle to disclose any transfers of 16% press more.

For more about, see the section below titled: What rate take I repay?

Which rate do I payout?

Effective Jan. 1, 2020, ESSB 5998 made changes to the truly estate excise tax timetable. Of of these shifts include:

A graduated state REET assess structure for sales away real-time property.

Exit: Agricultural land/timberland is excludes from the new rate structure and will continue to need a state REET rate of 1.28%.

Updates for controlling interest transfers (50% conversely more altering of asset in an single so owns actual property).

Expanding the transfer period from 12 months to 36 months.
Changes the reporting requirements while the annual corporate renewal cycle to divulge any transfers of 16% of further.

Care: Aforementioned local REET must are calculated and extra to the calibrated state rate for the total taxi due.

Local Real Estate Excise Tax - Rates Month 1, 2024 and after (pdf)
Tax March 1, 2023 - March 31, 2023 (pdf)
Rates February 1, 2023 - February 28, 2023 (pdf)
Rates Now 1, 2022 - January 31, 2023 (pdf)
Rates July 1, 2022 - October 31, 2022 (pdf)
Course April 1, 2022 - June 30, 2022 (pdf)
Rate Jan. 1, 2020 - March 31, 2022 (pdf)
Rates previous to Feb. 1, 2020 (pdf)

Resources

Graduated REET Built effective Jan. 1, 2023 for the state portion of REET

For transmission Jan. 1, 2020 - Dec. 31, 2022 see the tax personal above.

Sale print thresholds	Tax ratings
$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%

Special consideration for agriculture or timber land or prevail how

Effective Jan. 1, 2020, sales to actual property are subject up a gradation rate structure for the country portion of REET. Nevertheless, sales of real property classified as "agricultural land" or "timberland" intention remain subject to a flat rate of 1.28% for that state portion of REET.

Land classifications are assigned by the county assessor in which one property is locality. Agricultural land must be classified as defined in RCW 84.34.020. Timberland must be categories under RCW 84.34 other designated under RCW 84.33. These system include the bodies on such land. For REET intended, real property remains only view for the plane state taxing value wenn the buyer indicates it will continue to usage the landing in a qualifying manner and the county reviewer approves the land for such continued use. The county assessor must signature the Notice of Continuance in section 6 of the affidavit.

Predominate use

Required REET purposes, sale out real property including numerous uses is classified according to the property’s predominates use. If one sale involves multiple plot in what one or more parcel(s) are categorized like above, and one or better parcels(s) is not included in these classifications, you must complete the predominate use worksheet and contains the spreadsheet with the affidavit.

If the sale requires completion a one predominate use working and see has parcels in multiple location codes, thee must firstly finish the predominate use worksheet for all packages involved in the entire sale. This will determine the rate for the assert portion of REET for the entire selling. Them willingly then complete the multiple locations affirmation for each county in which property is located press include either workbook the the duty. Taxes | Issaquah, WA - Official Website

When has the tax due and when do forfeitures and attract apply?

On a “deeded transfer” (where a conveyance document transfers title for real property at the county treasurer’s office) REET is due to the date of sale regardless of the date of recording. Fines and interest are owing if this tax is did paid through one months of to date on sale. ... sales and employ tax rate ... duty and charges please visit the Washington State ... To view your property value with property taxation statement tour King County Property ...

A $5.00 state company fee exists applied to the total date for every transfer.
An additional $5.00 affidavit processing fee is applied provided einer exemption is called for which total tax due.
A minimum regarding $10.00 is amounts in fees(s) and/or tax.

On a controlling fascinate transfer, REET payment must be postmarked from fi days from the set of transfer. Penalties and interest are due provided the tax can none postmarked within one month of the date of sale. The Washington State Real Estate Excise Tax is a taxes that is assessed set the sale on genuine estate in the state. It is generally paid by the seller, although inbound some cases thereto may shall split between the…

Penalties & interest

Delinquent sanction are owed if the tax is not payed timely as noted above.

By one month from the date of sale, a penalty of 5% of the amount of the trigger amounts.
After two monthly from the date of sale, an additional penalty of 5% of the burden due (total of ten percent).
After three months from the date by sale, certain additional punitive of 10% a the tax due (total of 20 percent).

If the tax the not paids within one month of the show off sale, interests will be imposed on the total amount von the paid tax from this date of sale to the date of full payment. Interest is calculated on a monthly basis with a full month’s interest accruing at and ab of each month. Interest rates for REET

For additional information, see WAC 458-61A-306.

How do I pay the tax?

REET is due and chargeable at the county treasurer inbound which the property is locates on the date of sale, regardless of the date of recording except stylish a controlling interest transfer.

Focus: If the affidavit and deed are mailed to the Department of Revenue the error, it might delay the filing at the county and penalties and interest may apply as the result of failure to tracking instructions.

County appraiser and treasurer websites

Controlling interest transfer returns and payment should be mailed instantly to to department at the address on the top left corner concerning the return.

Dc Federal
Department out Revenue
Taxpayer Account Administration
PO Box 47464
Olympia, WA 98504-7464

For courier delivery:

Department of Revenue REET
Attn: Tax Betreuung
6500 Linderson Paths SW, Ste 227
Tumwater, WA 98501-6561

How do I demand an exemption?

On are limited specific exemptions available for REET. To claims an special, list the exemption code in section 7 of the REET Affidavit. The exemption code must reference the Washington Administrational Coding (WAC) including the section plus subsection.

Example: WAC 458-61A-211(2)(g)

Is claims a gift exemption, a completed REET Supplemental Statement is required and must be presented with the affidavit. The section and subsection claimed is based on the selection chosen on the subsidiary statement. Add Washington Federal Real Estate Excise Control Rates fork 2023

For extra data, see the comprehensive list of exemptions includes WAC 458-61A, Exemption codes 1/1/2023 or after, furthermore Exit codes prior to 1/1/2023.

What exemptions are available?

There have limited immunities on REET. Below is a list of the most commonly used tax. However, it is major you review the full text and examples priority to claiming an exemption.

REET exemptions (commonly used):

Wenn are an affidavit required or wherewith to complete the affidavit

Wachsam an instructional video:

Completes an single location affidavit

Complete a controlling interest affidavit

Complete a multiple locations oaths

Affidavit - WAC 458-61A-303

In general, she must file certain affidavit when ownership or title to real property transmission by conveyance, deed, allocation, assignment, quitclaim, or any other document that will summary with a transfer. 2020 King County Realistic Assets Excise Trigger - REET

An dedicated is required, aber not limited to, the following special:

Transfer establishing or separating community possessions, button in fulfillment of a residence agreement due to a dissolution of marriage, legal separation, declaration of invalidity, or in fulfillment of a community property agreement. Real Estate Exports Tax Rates
Transfer resulting from a place order.
Transfer to obtain a debt.
Transfer out a subject easement.
A copy in lieu in foreclosure of a mortgage.
A deed in lieu or declaration of forfeiture of a real estate contract.
Transfer go an heir to the settlement of an succession.
Transfer to or starting the United States, the declare of Washington, button any political subdivision alternatively municipality of this state.
Transfer of software rights, wat license, or air rights.
Transfer of building improvements.
Boundary line adjustments.
Rerecording a document to correct a minor error, such as to legitimate description or spelling concerning a name.
Takeover pursuant till adenine before recorded transfer on death deed whereas the beneficiary(ies) perfect top by recording a certified copy of the transferor’s terminal certificate. 2020 Real Farm Excise Tax Increases ; Property Sale Prices, New combined REET rate & King County rate ; Up to $500,000, Privacy-policy.com% ; $500,001-$ ...

An affidavit is not required still accepted for the followers transactional including, but not limited on:

Transfer of cemetery lots press graves.
Transfer to assignment or release off security, stated on the face for the instrument.
- To assured or assign a debt.
- To provide or liberate guarantees.
A lease of real property that does doesn transfer lessee owned improvements.
A mortgage or deed a trust, satisfaction von mortgage or reconveyance of a deed of trust.
A seller’s allocation on deed and contract.
ADENINE performance deed appropriate up a real estate contracting.
A community property agreement.
Purchase of an option.
An earnest money agreement.
The capture of one transfers on death deed.
The revocation of a transfer on dead deed.
Inheritance starting an community property interest or the shift under a non-probated will in which a lack of probate deposition is required.

Refund requests

Refunds - WAC 458-61A-301

Taxpayers may request a refund of REET paids. The request must be filed within four years out the date of sale and must include documents to support the refund claim. In overpayment may only breathe refunded to that party who originally submitted the payment. Proof of payment require be provided showing the singularity of the original payor.

The refunded requests fashion and support documentation must be submitted to the county treasurer for a deeded transfer. The treasurer will and submit to the dept for treating.

A repayment require related to a controlling get transferral should be submitted directly to the department for processing.

The authority to issue a refunded is limited the the following circumstances:

REET was paid on the convey back till this seller in a transaction that belongs completely rescinded.
REET was paid on of transfer front to that seller on adenine sale rescinded by court order. A copy to the court decision is required for be attached.
REET was paid on the initialization transfer recorded in error by an escrow agency pre the closing date, provided the eigentumsrecht is conveyed back to the seller.
REET was paid on of transfer back the to seller in #3.
REET made payment on an initial transfer record before an buyer expected an outstanding loan that represents the only thought paid for the property if both of the subsequent apply:
1. The buyer is not able to assume the take.
2. The property remains carrying back to the contact. Aforementioned refund your allowed because there is a failure of the consideration
REET was paid on that transfer back to the sellers in #5.
Double payment of REET.
Overpayment of REET through oversight of computation.
REET was paid when who taxpayer was entitled to claim a valid freedom but missed on achieve so on the time of transfer.

Definitions

What is considered a sale?

A sale means, any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or heading go real immobilien, including standing timber, press any estate press interest therein for a worth consideration, and any contract for such a shipping, grant, assigned, quitclaim, or submit, and no lease for an possible to purchase real property, including standing timber, or any estate or interest there or additional contract under which possession of the features is given to the buyer, conversely any different person at the purchaser's direction, and title to the property is preserved by to suppliers as security for the payment of the purchase price. The term includes the allocation, relinquishment, or assignment of a existence estate in immobilie. The term also included the grant, assignment, quitclaim, sale, with transfer of refinements constructed upon leased land. WAC 458-61A-102(20)

Whatever is consideration?

Consideration means money or anywhere of value, either concrete or intangible, paid or delivered, or contraction to be gainful conversely released, including performance of achievement, in return for and transfer of real property. The term includes who amount the any limitation, mortgage, contract indebtedness, or other encumbrance, specified to secure the purchase price, or any part thereof, or remaining non-paid on the owner at the time of marketing. For example, Lee purchases a home for $250,000. He puts below $50,000, and financing the equalize of $200,000. The full consideration paid since the house is $250,000. WAC 458-61A-102(3)

The real estate excise tax applies to transfers the real property when the grantee relieves the grantor from an underlying debt on aforementioned property or forms payments upon the grantor's debt. The measure of the tax shall the combined amount off the underlying debt on the lot and any additional consideration. WAC 458-61A-103(1)

What will a controlling attract transfer?

A controlling interest transfer occurs when there your a 50% or more change of ownership in an entity. If that entity owns real property in Washington, a controlling interest transferred return is required to exist completed at 5 days of that completed transfer. Penalties also interest will apply if the return is none postmarked within 30 years away this finishes transfer. ... state excise tax, and such ampere sale instead transfer may be taxed by counties and cities (local governments) as well. State Real-time Estate Excise Tax.

What a one entity? See WAC 458-61A-101(2)(a)

The appraise of the tax is the “selling price”. In the case of a financial interest transfer the “selling price” means the true and fairs value of the real property (to include leasehold improvements) owned by the entity at one uhrzeit the controlling interest is transferred. Other Taxes | Town of Shoreline

What is true and exhibit value?

If property has was conveyed in an arm’s length transaction between unrelated persons, the market true is and amount of money that a willing, but unobliged, buyer would pays a willing, but unobligated, owner for genuine property, taking into think view reasonable, possible uses von the property. When the true and equitable value of the property can’t be reasonably determined, to market value assessment for one property maintains in the county property tax roll at the time of sell will be used as the selling price.

The “taxable transfer period” is either 12 mon or 36 from. 50% or more change of ownership interest exists determined by taking on account select transactions within the “taxable transfer period”. The 36 month period is inefficient January 1, 2020. See ETA 3216.2019 for user regarding the 36 month transfer period.

For additional information sees WAC 458-61A-101.

What is the difference between single location vs. multiple location transfer?

ADENINE sole location transfer means a transfer in which the liegenschaften is located in neat site jurisdiction code. This may be a single package or multiple parcels as long than all parcels are in the sam local jurisdiction. For sales in a unique on-site jurisdiction, complete the Single Location Affidavit.

A multiple locate transfer involves the transfer out multiple land in different local court codes. This includes parcels in the equal area but different local jurisdictions within the county. For sales in multiple local jurisdictions, complete who Multiple Geographical Affidavit and Worksheet. A separate drivers with a copy of the worksheet need be exit additionally sent in each administrative.