Eighty percent of Washingtonians would receive a tax cut on the sale of real estate thanks to legislation passed Thursday by the state Senate. Senate Bill 5998 would reform real estate excise taxes (REET) to a graduated scale, in which property sales under $500,000 are reduced to a 1.1 percent rate while the highest tier of properties, those sold for more than $3 million, would be taxed at three percent.
Anyone who sells a house for less than $1.5 million would receive a tax cut on that sale.
“You’ve heard it a million times before: Washington state’s tax code is completely upside down, favoring those at the top end while punishing those struggling to get by,” said bill sponsor Sen. Joe Nguyen (D-White Center). “With this legislation, we are taking a major step toward fixing our broken tax code. The simple truth is that no one selling a property for $3 million is struggling to make ends meet.”
The current rate on Washington’s REET is a flat 1.28 percent. The new graduated rates would bring in an additional $600 million dollars over the next four years, all of which would be dedicated to the Education Legacy Trust Account.
“Making our tax code fairer while dedicating additional funds to education are mutually attainable goals that we achieve through this bill,” said Nguyen. “Only about two-percent of sellers, the wealthiest among us, would see their taxes increased. It’s time we ask those wealthy few to pay their fair share to build a Washington that works for all.”
The graduated REET scale under SB 5998 would implement the following:
- 1.1-percent if the selling price is equal to or less than $500,000
- 1.28-percent on the portion of the selling price that is greater than $500,000 but equal to or less than $1,500,000
- 2.75-percent on the portion of the selling price that is greater than the $1,500,000 but equal to or less than $3,000,000
- 3-percent on the portion of the selling price that is greater than $3,000,000
SB 5998 passed the Senate on a vote of 26-22 and now heads to the House of Representatives for consideration.