Effective Jan. 1, 2020, ESSB 5998 made changes to the real estate excise tax program, which can have a significant impact on certain property transactions, said Peter Abbarno and Todd Rayan, partners with the law firm Althauser Rayan Abbarno, LLP.
The real estate excise tax is imposed at the following rates, beginning January 1st:
- 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 $1,500,000, but equal to or less than $3,000,000; and
- 3 percent on the portion of the selling price that is greater than $3,000,000.
A rate of 1.28 percent is imposed on the sale of undeveloped land, timberland, agricultural land, and water or mineral rights, regardless of selling price.
There have been a lot of land classification and REET rate questions towards the end of the year, said Peter Abbarno, attorney with Althauser Rayan Abbarno. For certain property transactions, it was very important to finalize prior to January 1 and avoid the tax increase.
Real estate excise tax (REET) is a tax on the sale of real estate. The real estate excise tax is typically paid by the seller of the property, although the buyer is liable for the tax if it is not paid. The tax applies to the seller. The tax also applies to transfers of controlling interests (50% or more) in entities that own property in the state.
For a consultation in Olympia or Centralia, call Althauser Rayan Abbarno at (360) 736-1301 or visit CentraliaLaw.com Whether you are seeking to develop a large commercial tract of land or simply need contract assistance for a commercial real estate transaction, we are pleased to offer out assistance.
For over 70 years, Althauser Rayan Abbarno has provided experienced legal representation on behalf of real estate purchasers, sellers, investors, and developers, said Todd Rayan, attorney with Althauser Rayan Abbarno, LLP. We assist clients with residential and commercial real estate matters ranging from simple quitclaim deeds, boundary line issues and transactions, to multimillion- dollar development agreements.
Contact us today to schedule a consultation. For questions about property transactions or to schedule your consultation with Althauser Rayan Abbarno in Olympia or Centralia, call (360) 736-1301 or visit www.Centralialaw.com