Real Estate Excise Tax Washington: Who Pays and How Much

Washington State levies a Real Estate Excise Tax — REET — on virtually every property transfer in the state. First-time buyers searching for closing cost estimates frequently land on REET and assume it's their expense. It isn't. Under standard Washington real estate contracts and state law (RCW Chapter 82.45), the seller pays REET. But understanding how the tax is calculated still matters to buyers, because it directly shapes how much the seller nets from the sale — and that affects their flexibility on price and concessions.

Washington's Progressive REET Rate Structure

Washington uses a graduated rate structure for most residential properties. The rate doesn't apply uniformly to the full purchase price; instead, different portions of the price are taxed at different rates:

For a $750,000 home sale in Snohomish County, the state REET works out like this:

• $525,000 × 1.10% = $5,775
• $225,000 × 1.28% = $2,880
• Total state REET: $8,655

On top of that, Snohomish County levies a combined local REET of 0.50% on the entire purchase price: $750,000 × 0.50% = $3,750. Total REET owed by the seller at closing: $12,405.

For agricultural or timberland, a flat 1.28% rate applies regardless of the sale price.

Local REET Add-Ons

In addition to the state's graduated rate, local jurisdictions can levy flat REET surcharges:

• REET 1 — A flat 0.25% used for capital projects. Nearly every city and county in Washington has implemented this.
• REET 2 — An additional flat 0.25% available to jurisdictions planning under the Growth Management Act. High-density urban areas including Seattle, Bellevue, Tacoma, Everett, and Olympia impose both REET 1 and REET 2, for a combined local rate of 0.50%.

One unusual exception: San Juan County has enacted a Conservation Areas REET of up to 1.0% — and this particular tax is the buyer's obligation, not the seller's. If you're buying in San Juan County, account for this in your closing cost estimates. It's the only jurisdiction in Washington where a buyer-side REET surcharge applies.

Effective January 1, 2026, transfers to nonprofits or public housing agencies for qualified affordable housing are fully exempt from REET.

Why Buyers Need to Understand REET

Even though REET is the seller's expense, it has two practical implications for buyers.

First, it reduces seller net proceeds substantially on higher-priced homes. A seller netting $1,525,000 faces state REET alone of roughly $17,000. When you're negotiating price reductions or asking for closing cost credits, understanding the seller's tax burden helps you gauge how much room they have.

Second, there's a narrow but real buyer liability. Under Washington law, if the seller underpays REET, fails to pay it at all, or claims a fraudulent exemption, the state can place a statutory tax lien on the property itself. This lien attaches to the property — not just the seller — which means a buyer could theoretically inherit the liability if the lien isn't discovered before closing.

In practice, this risk is managed by two things: your escrow company and your title insurance. A competent escrow officer calculates and withholds REET from the seller's proceeds at closing, ensuring it's remitted to the county treasurer before the deed records. And a standard owner's title insurance policy protects you against pre-existing liens, including improperly handled REET obligations, that weren't caught before closing.

The takeaway: REET isn't your bill, but it's worth knowing it's been properly handled before you close.

Recent REET Changes That Affect Buyers

Washington's REET structure was updated in January 2023 when the graduated bracket system replaced the old flat-rate approach. The change raised the effective tax on high-value sales while reducing or maintaining the rate on entry-level sales below $525,000.

Recording fees — which are separately charged to record the deed and deed of trust at closing — have also risen. As of July 27, 2025, the baseline recording fee for a standard deed is $303.50 for the first page, with a deed of trust costing $304.50. Each standard recording includes a $183 housing affordability surcharge and a $100 Covenant Homeownership surcharge embedded in the fee structure.

These fees are the buyer's expense (not the seller's), so factor them into your closing cost estimate alongside lender fees, title insurance premiums, and prepaid expenses.

What to Watch For in Escrow

Before your closing date, request a preliminary HUD-1 or closing disclosure from your escrow officer. Verify that:

1. REET has been calculated correctly using the graduated bracket system plus the applicable local flat rate for your county
2. The escrow company is remitting REET to the county before recording the deed
3. The preliminary title commitment shows no existing REET liens from prior transactions on the property

If you're buying in a jurisdiction with multiple local REET layers — common in Seattle, Bellevue, Tacoma, and other major cities — confirm both REET 1 and REET 2 are included in the seller's closing statement.

For a full closing cost worksheet covering REET mechanics, recording fees, lender charges, and title insurance premiums calibrated to Washington's specific structure, the Washington First-Time Home Buyer Guide walks through every line item.

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