Washington State Real Estate Excise Tax (REET) Explained

Washington State’s Real Estate Excise Tax (REET) is one of the largest seller closing costs most sellers don’t calculate until the final HUD-1. On a $700,000 King County sale, REET alone is approximately $8,286. On a $1,500,000 sale, it’s approximately $19,167. This isn’t a rounding error — it’s a significant line item that should appear in your net sheet before you set a list price.

What REET Is

REET is a state excise tax on the sale of real property in Washington State. The seller pays it. It’s collected by the title or escrow company at closing and remitted to the Washington Department of Revenue (DOR).

The rate is graduated — Washington moved from a flat rate to a tiered structure in January 2020. Higher-priced sales are taxed at higher marginal rates, similar to how income tax brackets work.

The Rate Structure

As of the 2020 reform, the state REET rates are:

Sale Price Tier	State REET Rate
First $525,000	1.1%
$525,001 – $1,525,000	1.28%
$1,525,001 – $3,025,000	2.75%
Over $3,025,000	3.0%

These are marginal rates applied to each tier — not a flat rate on the full price.

Local REET: In addition to the state rate, some cities and counties levy a local REET. The City of Seattle and other jurisdictions have added local rates for affordable housing and other purposes [VERIFY current City of Seattle local REET rate and any King County additions — local rates have changed and should be confirmed with a title company at time of sale]. The calculations below reflect state REET only; add local rates for homes within affected jurisdictions.

How the Math Works: Showing Your Work

For a home selling at $1,000,000:

• First $525,000 × 1.1% = $5,775
• Remaining $475,000 ($525,001–$1,000,000) × 1.28% = $6,080
• Total state REET: $11,855

The table below applies the same logic across common Seattle-area price points.

REET Calculator: Common Sale Prices

Sale Price	Tier 1 (×1.1%)	Tier 2 (×1.28%)	Tier 3 (×2.75%)	Tier 4 (×3.0%)	Total State REET
$700,000	$525k × 1.1% = $5,775	$175k × 1.28% = $2,240	—	—	$8,015
$1,000,000	$525k × 1.1% = $5,775	$475k × 1.28% = $6,080	—	—	$11,855
$1,500,000	$525k × 1.1% = $5,775	$975k × 1.28% = $12,480	—	—	$18,255
$2,000,000	$525k × 1.1% = $5,775	$1,000k × 1.28% = $12,800	$475k × 2.75% = $13,063	—	$31,638
$2,500,000	$525k × 1.1% = $5,775	$1,000k × 1.28% = $12,800	$975k × 2.75% = $26,813	—	$45,388
$3,025,000	$525k × 1.1% = $5,775	$1,000k × 1.28% = $12,800	$1,500k × 2.75% = $41,250	—	$59,825

Note: Figures above are state REET only. Add applicable local REET for properties within City of Seattle or other affected jurisdictions [VERIFY local rates]. The original prompt referenced slightly different totals — use the tier math above for accuracy and verify with your title company.

How to calculate your own:

1. Apply 1.1% to the first $525,000.
2. Apply 1.28% to the amount between $525,001 and $1,525,000.
3. If over $1,525,000, apply 2.75% to the amount between $1,525,001 and $3,025,000.
4. If over $3,025,000, apply 3.0% to everything above that.
5. Sum all four tiers.

Exemptions

REET is not universally applied. Washington law provides exemptions in specific circumstances:

• Transfers between spouses or domestic partners as part of a property settlement or as a gift — principal residence transfers in this category are often exempt. Confirm with the escrow company.
• Transfers to a trust where the transferor retains beneficial interest may qualify for reduced or no REET, depending on structure.
• Certain corporate reorganizations and mergers where real property ownership changes as part of a broader entity transaction.
• Foreclosures and deeds in lieu of foreclosure — partial exemption may apply.
• Gifts with no consideration may be exempt if no money changes hands.

These exemptions have specific requirements and limitations. The escrow company handles the REET affidavit and can advise on whether your transaction qualifies, but you should consult a real estate attorney or CPA for tax planning if you’re in a situation where an exemption might apply.

When REET Is Due

REET is due at closing. The title or escrow company collects it from seller proceeds and remits it to the Washington DOR. It’s not a choice — the deed cannot be recorded without the REET affidavit being completed and payment confirmed.

The REET affidavit (Washington State DOR Form 84-0001A) is completed by escrow, identifies the property and parties, and documents the sale price. It’s filed with the county auditor at recording.

The Common Seller Mistake

Most sellers focus on the commission line when building a net sheet. REET is an afterthought — until they see the closing disclosure.

On a $1,500,000 King County home, state REET is approximately $18,255, potentially higher with local additions. That’s comparable to or greater than title and escrow fees combined. It belongs in your pre-listing financial planning, not in a last-minute closing cost surprise.

Run a basic net sheet before listing:

Sale price:                        $1,500,000
Less: REET (state, estimated):      -$18,255
Less: Local REET (verify):          -[varies]
Less: Title/escrow:                  -$3,000 (estimated [VERIFY])
Less: Listing agent fee (WA Homes Full): -$4,495
Less: Buyer's agent fee (if offered):   -$30,000 (2%)
Less: Prorated property taxes:      -[calculate]
Less: Mortgage payoff:              -[your balance]
                                   ___________
Estimated net proceeds:            [calculate]

This math — not the sale price — is what you actually take home.

Flat Fee vs. Percentage: How the Commission Line Fits

REET is fixed by law. You can’t negotiate it. What you can control is the listing agent commission.

On a $1,500,000 sale:

• 3% listing commission: $45,000
• WA Homes Full flat fee: $4,495

The $40,505 difference between those two figures is real money in your net sheet — far exceeding REET for most transactions. A seller paying a percentage commission on a $1.5M home pays more in listing agent fee alone than they pay in REET.

Additional Resources

• Washington DOR REET page: dor.wa.gov — authoritative source for current rates, exemptions, and affidavit forms.
• King County Recorder: records REET affidavits at closing and can confirm local rate additions.
• Your escrow company: will calculate your specific REET obligation as part of the closing disclosure. Always request a preliminary net sheet from escrow before accepting an offer.

Bottom line: REET is a graduated tax from 1.1% to 3% of sale price, paid by the seller at closing. On most Seattle-area sales, it runs $8,000–$60,000 depending on price. Calculate it early, include it in your net sheet, and don’t let it be a closing-day surprise.