Real estate excise tax (REET) exemption for the sale of space in an affordable housing development for community use

Issue Date

October 01, 2025

Intended audience: Owners of affordable housing developments, nonprofit organizations, housing authorities, public corporations.

Starting on Jan. 1, 2026, the sale of qualified spaces in an affordable housing development to a nonprofit organization, housing authority, or public corporation for an exempt community purpose use is exempt from REET.

What are the requirements?

To qualify for this exemption all the following must be true:

The development must qualify for an exemption from real and personal property taxes under RCW 84.36.560, 84.36.049, 35.82.210, 35.21.755, or 84.36.010.
The sale must be of a qualified space.
The space must be used for an exempt community purpose.
The real property sold must be a separate legal parcel.
The buyer must be a nonprofit organization, a housing authority, or a public corporation.
A REET Affidavit must be completed for each transfer of real property, and the Qualified Space for Community Purpose exemption code, 82.45.010(3)(w), must be referenced in Section 7 of the affidavit form.

Definitions

Affordable housing development means a development with housing provided to households with a household income that does not exceed 80 percent of median household income at initial occupancy, adjusted for household size, for the county in which the dwelling is located.
Exempt community purpose means any use to provide a service that benefits affordable housing development tenants or the public including, but not limited to, health clinics, senior day care, food banks, community centers, and early learning facilities.
Nonprofit organization means an organization exempt from taxation under section 501(c)(3) of the internal revenue code of 1986 (26 U.S.C. Sec. 501(c)(3)), as amended.
Qualified space means any portion of an affordable housing development that is accessible to tenants or the public that constitutes a separate legal parcel of property under chapter 64.32, 64.34, or 64.90 RCW.