Selling in Seattle or King County and trying to pin down your bottom line? One closing cost you do not want to miss is Washington’s Real Estate Excise Tax, commonly called REET. If you plan ahead, this tax will not surprise you at the closing table. In this guide, you will learn what REET is, who typically pays it, how it is calculated, when it is due, and which exemptions might apply to your situation in King County. Let’s dive in.
What REET is in Washington
Real Estate Excise Tax is a tax on the sale or transfer of real property located in Washington State. It is imposed by state law and administered locally. The core statutes are in the state’s RCW chapter that governs real estate excise tax. You can review the legal framework in the RCW chapter for real estate excise tax and the state’s practical overview on the Washington State Department of Revenue REET page.
In Washington transactions, sellers customarily pay REET unless the purchase and sale agreement states otherwise. Title and escrow companies usually calculate the amount, collect it at closing, and submit the return.
Who pays and who files in Seattle
By custom in King County, the seller pays REET, but the parties can negotiate this in the contract. Be sure your purchase and sale agreement states who is responsible for the tax. In practice, your escrow or title company prepares the REET affidavit, collects the tax from the responsible party, and files the return with the county.
For local procedures and filing details specific to Seattle and King County, you can check the King County Treasurer’s REET information.
How REET is calculated
REET is generally calculated as a percentage of the sale price, which is called the consideration. Depending on state law at the time of your sale, Washington may use graduated tiers and local components. The basic formula is straightforward: REET due equals the sale price multiplied by the applicable rate or rate tiers.
Always confirm the current rates and any thresholds before you list. The state publishes current rules and forms on the Department of Revenue’s REET page, and King County explains local filing on the Treasurer’s site.
A simple example
The numbers below are for illustration only. Confirm the current rate schedule before you calculate your proceeds.
- Example: If your sale price is $800,000 and the applicable combined REET rate works out to 1.5 percent, the REET would be $12,000. That is $800,000 multiplied by 0.015.
Your escrow officer will run the exact calculation for your transaction and show it as a separate line item on your seller net sheet.
If your sale includes other assets
If your transaction includes both real property and personal property or business assets, how you allocate the sale price matters. Only the real property portion is subject to REET. Be prepared to document allocations and have your title, escrow, or legal advisor confirm what is taxable.
Timing, filing, and receipts in King County
There is a statutory deadline to file and pay REET after closing. Title and escrow companies usually handle filing so you stay on time. Late filing can lead to penalties and interest, so confirm the timing with your escrow team.
After closing, request a copy of the filed REET return and the tax receipt. Keep these with your closing package. You may need them for your records and for any tax reporting.
Common exemptions and special cases
Some transfers are exempt or partially exempt from REET. These are fact specific and usually require documentation. Common categories include:
- Certain transfers between spouses or as part of a divorce property division
- Transfers by gift where no consideration is paid
- Transfers on death, such as inheritance through probate, where no consideration is paid
- Transfers to certain governmental entities or transfers pursuant to court order in limited circumstances
- Some foreclosure-related transfers that have special rules
If you are changing ownership within an entity that owns real property, REET can be triggered by a change in controlling interest. The rules and lookback periods are technical. Review the statute in the RCW for real estate excise tax and confirm your situation with your attorney or CPA, and your escrow officer.
Practical tips for Seattle and King County sellers
- Plan your net: REET is an out-of-pocket cost at closing. Ask your broker or escrow for a net proceeds worksheet that shows REET as its own line.
- Put it in writing: If you negotiate who pays REET, make sure the purchase and sale agreement clearly states responsibility and how any calculation disputes are handled.
- Sort out entity moves early: Moving property into or out of an LLC, adjusting ownership percentages, or reorganizing before you sell can have REET consequences. Get advice before you make changes.
- Keep taxes separate: REET is a transfer tax. It is separate from federal or state income taxes, including capital gains. Each has different rules and planning options.
- Coordinate with escrow: Ask your title or escrow team to confirm how they will calculate, collect, and file the tax. Request copies of the return and receipt for your files.
A quick net sheet check
Here is a simple way to see the impact on your proceeds. The numbers are illustrative only.
- Sale price: $950,000
- Hypothetical combined REET rate: 1.5 percent
- Estimated REET: $14,250
This is only one line among your closing costs, but it can be significant. Verify current rates with the Department of Revenue and confirm your exact numbers with escrow.
Seller checklist for closing
Use this to make sure nothing slips through the cracks.
- Ask for a seller net sheet that lists REET as a separate line item.
- Confirm in the purchase and sale agreement who is responsible for REET.
- Ask your title or escrow company:
- Who will calculate and collect REET at closing.
- When and where the REET return will be filed in King County.
- When you will receive the REET receipt and a copy of the filed return.
- Ask whether any exemption or special allocation applies and what documents will be filed to support it.
- If an entity or ownership change is involved, consult a real estate attorney and a tax advisor before closing.
- Keep copies of the executed REET return and the county treasurer’s receipt for your records.
Your next step
If you are planning to sell in Seattle or anywhere in King County, build REET into your pricing and timeline early. The right team will coordinate with escrow, confirm exemptions, and keep your closing on track.
Want help estimating your net and preparing a smooth sale plan? Schedule a free consultation with Unknown Company and get a clear path from list to close.
FAQs
What is Washington’s REET for home sellers?
- Real Estate Excise Tax is a state tax on the sale or transfer of real property in Washington, filed and paid at the county level. See the DOR REET overview for current guidance.
Who usually pays REET in King County?
- Sellers customarily pay REET in Washington, including King County, unless the purchase and sale agreement assigns it to the buyer.
How is REET calculated for a Seattle home sale?
- REET is calculated as a percentage of the sale price, sometimes using graduated tiers. Confirm the current rate schedule with the Department of Revenue.
When is REET due after closing in King County?
- There is a statutory filing and payment deadline after closing. Title and escrow typically handle timely filing with the King County Treasurer.
Are there REET exemptions that could apply to me?
- Certain transfers, such as some spousal transfers, gifts without consideration, and transfers on death, may be exempt. Rules are specific, so review the RCW governing REET and confirm with your escrow and legal advisors.
Does moving property into an LLC avoid REET?
- Not necessarily. Transfers of title or changes in controlling interest in an entity can trigger REET. Consult counsel and verify how the rules apply to your situation under the RCW.
