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Real estate excise tax FAQs

Graduated REET

What is graduated REET and what is the rate?

Beginning with sales dated Jan. 1, 2020 or later, the state portion of REET was changed to a graduated structure based on the selling price. The local portion of REET must be added to the total of the state portion to calculate the total tax.

Graduated REET structure

Sale price thresholds

Tax rate

$500,000 or less

1.10%

$500,000.01 - $1,500,000

1.28%

$1,500,000.01 - $3,000,000 2.75%
$3,000,000.01 or more 3%
Is there a different rate for agriculture land and timber land (classified land)?

There is an exemption from graduated REET for sale of real property classified as “agricultural land” as defined in RCW 84.34.020 (including structures on such land). The exemption also applies to “timberland” classified under RCW 84.34 or designated under RCW 84.33 (including structures and timber on timberland) as well as timber sold apart from the timberland. These are considered “classified land”. Property falling under these classifications will be taxed at a rate of 1.28% for the state portion. Land classifications are assigned by the county in which the property is located, for additional information contact the county assessor’s office. For REET purposes, real property is only considered for the - preferential predominate use rate if the buyer indicates it will continue to use the land in a qualifying manner and the county assessor approves the land for such continued use (Section 6 of the affidavit). See ETA 3215.2020 for additional information.

What if only a portion of the property sold is classified land (predominate use)?

Sales of real property with multiple uses is classified according to the property’s predominate use for REET purposes, i.e., classified land or non-classified land. The department has provided a Predominate Use Worksheet to calculate the predominate use for purposes of determining the correct REET rate.

How do I report a sale with parcels in multiple locations?

Beginning Jan. 1, 2020, if the property transfer involves parcels in multiple location codes you must use the multiple locations affidavit and complete the multiple location codes worksheet. Complete the worksheet first to calculate how much state and local REET is due for each location, then transfer that information to the affidavit(s). A separate affidavit with a copy of the worksheet must be filed for each county in which property is located.

Controlling interest

What is controlling interest?

In the case of a profit corporation, either 50% or more of the total combined voting power of all classes of stock of the corporation entitled to vote, or 50% of the capital, profits, or beneficial interest in the voting stock of the corporation.

In the case of any other corporation, or a partnership, association, trust, or other entity, 50% or more of the capital, profits, or beneficial interest in such corporation, partnership, association, trust, or other entity.

The transfer of a controlling interest in an entity that has an interest in real property in this state is considered a taxable sale of the entity's real property for purposes of the real estate excise tax under chapter 82.45 RCW. WAC 458-61A-101

I’m completing the controlling interest section of the annual report for Secretary of State. Am I required to file a Controlling Interest Transfer Return?

You will have to submit the return if you answered “yes” to questions 1 AND 2a. If you answered no to either of these questions you will not have to submit the return.

What is the "lookback" period for controlling interest?

Beginning Jan. 1, 2020, the Legislature expanded the “lookback” period from 12 months to 36 months. Controlling interest transfers can occur over time and in stages through multiple sales. The “lookback” period is the timeframe over which multiple transfers are combined to determine whether a controlling interest has been transferred. See ETA 3216.2019 for additional information.

Where should the Controlling Interest Transfer Return be mailed and who is the payee?

The payments should be made payable to: Washington State Department of Revenue

Mail payment to the address on the top left corner of the return:

Washington State
Department of Revenue
Taxpayer Account Administration
PO Box 47464
Olympia, WA 98504-7464

For courier delivery:

Department of Revenue REET
Attn: Treasury Management
6500 Linderson Way SW, Ste 227
Tumwater, WA 98501-6561

Exemptions

How do I gift my property?

Generally, a gift of real property is not subject to REET if no consideration is given. Consideration may include monetary payments or anything of tangible value given to the grantor. Consideration may also be payment by the grantee toward underlying debt on the property (debt relief). Equity can be gifted but debt cannot. In order to claim a gift exemption, completion of the supplemental statement is required and must be submitted with the affidavit. See WAC 458-61A-201 for the gift exemption rules and examples.

My transfer may qualify under multiple exemptions. Should I list them all?

Only one exemption can be claimed per transfer.

General information

How do I file the REET affidavit and pay the tax?

The affidavit, conveyance document and payment for a deeded transfer of property must be submitted to the county treasurer in which the property is located.

The affidavit and payment for a controlling interest transfer must be submitted to the address on the top left corner of the affidavit.

What should I do if the information will not fit on the REET affidavit?

Multiple grantors/grantees or parcel numbers/legal descriptions that do not fit on the allotted lines on the affidavit should be included on additional pages (exhibits) and submitted with the affidavit.

What was the REET rate prior to Jan. 1, 2020?

For sales/transfers prior to Jan. 1, 2020, REET is a combined flat rate that includes the state and local components. The rate is based on the location in which the property is located.
See rates prior to Jan. 1, 2020 for 2019 rates and historical rate information for prior years.

What should be used as the date of sale?

The date of sale is the date the conveyance document is executed and delivered to the grantee or the grantee’s agent. Therefore, the date of sale is the date the deed is notarized. If a taxpayer disagrees, they have the burden of proof.

I received a letter notification that my transfer is under audit. What should I do?

The most important thing to do is communicate with the examiner identified on the letter you received. Provide the information requested by the due date. If you can’t meet the due date in the letter or have questions about the requested documents, contact the assigned examiner to request clarification or an extension. If you authorize anyone else to communicate with the department on your behalf you must complete a confidential tax information authorization prior to the department releasing any confidential tax information.

Can a Power of Attorney (POA) sign REET documents?

The affidavit may be signed by an agent for the grantor or grantee. However, the supplemental statement (required for certain exemptions) must be signed by the grantor and grantee. A POA may sign the supplemental statement IF the documents appointing the POA allow for the transfer of real estate and the documents are provided to the county at the time of transfer.