Selling a home in Fircrest or handling a Pierce County estate? One line item can surprise you at closing: Washington’s Real Estate Excise Tax. You want a clear answer on what it is, who pays it, and how the tiered rates work without wading through legal jargon. This guide gives you a plain‑English overview, common exemptions, and local filing tips so you can plan your net proceeds with confidence. Let’s dive in.
What REET is and why it matters
Real Estate Excise Tax, or REET, is a tax on the sale or transfer of real property in Washington. It is administered at the state level and applies to most residential sales, including houses, condos, and land. The tax is calculated on the “consideration” for the transfer, typically the sale price.
Why it matters to you: REET reduces seller net proceeds and can influence timing for estate and trust sales. You can review definitions, current rules, and forms on the Washington Department of Revenue’s Real Estate Excise Tax page. For the statute itself, see RCW 82.45.
- Review rates, examples, and forms on the Washington Department of Revenue’s Real Estate Excise Tax page: Washington DOR REET
- Read the governing statute for definitions and exemptions: RCW 82.45
Who usually pays REET in Fircrest
In a typical residential sale, the seller pays REET. Your purchase and sale agreement could shift that cost to the buyer, but that is uncommon in our area. Title and escrow companies usually collect the tax at closing and remit it with the required forms.
If you are selling without title or escrow services, you or your representative must file the REET return and pay the tax per Department of Revenue instructions. Late filing and payment can trigger penalties and interest.
How Washington’s tiered rates work
Washington uses a tiered, or progressive, rate schedule. The rate you pay is tied to the sale price. Higher portions of the sale price are taxed at higher rates based on the state’s schedule.
Two key points to keep it simple:
- REET applies to the sale price. The rate is determined by the state’s tier brackets.
- The schedule is progressive. Only the portion of the price within a higher tier is taxed at that higher rate.
Because the Legislature can adjust rates and thresholds, always confirm the current table on the DOR REET page before you rely on an estimate.
Quick illustrations
These are for illustration only. They show the concept, not current rates. Check DOR for exact brackets and examples.
- Example 1: A Fircrest home sells for $650,000. Most of the price sits in lower tiers, and only the portion above the first threshold is taxed at a higher rate.
- Example 2: A higher‑end Tacoma sale at $1,200,000 crosses more tiers. Each slice of the price is taxed at the rate for that slice. Your title company will calculate the total and include it on your closing statement.
Tip: Ask your escrow officer or agent for a net sheet with an estimated REET line early in your planning.
Common exemptions and special cases
Some transfers are exempt under the statute. Whether your situation qualifies depends on the facts and documentation, so it is important to review the rules and speak with a qualified professional when needed. You can read the statutory language in RCW 82.45 and confirm current guidance with the Department of Revenue.
Transfers between spouses or domestic partners
Many transfers between spouses or state-registered domestic partners qualify for exemption. Documentation is required to claim the exemption. Verify details with DOR before recording documents.
Inheritance and estate sales
There is an important distinction for heirs and personal representatives:
- Transfers by inheritance without a sale can be exempt. If title passes to an heir as part of the estate process and no consideration is paid, that transfer may qualify for exemption.
- If the estate sells the property, that is typically a taxable sale like any other. The estate, as seller, may owe REET unless a statutory exemption applies.
- If an heir receives the property and later sells it, the heir’s sale is a taxable transfer.
Process and paperwork matter. Probate orders, affidavits, and correct forms are important to claim any exemption.
Gifts and transfers to trusts
Transfers with no consideration, such as pure gifts, may qualify for exemption. Certain transfers into or out of trusts are exempt when beneficial ownership does not change. Inter‑family transfers that involve consideration may be taxable. Because the facts drive the outcome, consult a tax advisor or estate attorney for your specific scenario.
Filing, payment, and Pierce County logistics
In most residential transactions, title or escrow handles filing and payment at closing. If you are handling a non‑escrow transfer, follow DOR filing instructions for returns, payment, and deadlines. Late filings can trigger penalties and interest.
For local administrative questions, contact the Pierce County Treasurer and Recording offices. County staff can confirm where filings are delivered if handled outside of escrow and provide local procedural guidance: Pierce County official website.
Keep copies of everything. Retain your closing statement, REET affidavit or return, and any exemption documentation.
A simple net proceeds checklist
Use this quick list to estimate what you take home at closing. Your title company or broker can generate a custom net sheet for you.
- Sale price
- Less: Payoff(s) for mortgage or liens
- Less: Real estate commission per your listing agreement
- Less: Estimated REET per DOR tier schedule
- Less: Title, escrow, recording, and other closing fees
- Equals: Estimated net proceeds
Ask your escrow officer to include an estimated REET line early so you can plan timing, repairs, and move‑out with a clear picture.
Timing and planning considerations
The timing of a transfer can matter, especially for estates and higher‑value properties. If you are planning multiple sales or considering moving property into a trust before selling, talk with your attorney and tax advisor early. The sequence of transfers, the presence or absence of consideration, and documentation all affect whether an exemption applies.
Your to‑do list if timing could change taxes:
- Confirm current REET brackets and filing rules on the Washington DOR REET page
- Coordinate with probate or estate counsel before signing deeds
- Ask your broker or title company for side‑by‑side net sheets under different timing scenarios
Local examples to make it concrete
Here are a few common situations we see in Fircrest and the greater Tacoma–Lakewood area:
- Gifting to an adult child: A parent deeds the Fircrest home to a child as a gift. If there is no consideration and the documentation supports the exemption, the transfer may be exempt. If the child later sells the home, that sale is taxable.
- Estate sale in Pierce County: The personal representative lists and sells the property. The sale is generally taxable, and REET is paid from the estate proceeds at closing.
- Trust planning: An owner transfers a home into a revocable living trust where they remain the beneficiary. If beneficial ownership does not change and the transfer meets statutory criteria, it may be exempt. A later sale by the trust is generally taxable.
In each case, confirm your facts and paperwork with your title company and legal or tax advisors.
Quick checklist for Fircrest sellers and heirs
- Ask your title or escrow officer to include REET on your early net sheet
- Review your purchase and sale agreement to see who pays REET
- For estates or trusts, speak with your probate or estate attorney before you transfer title
- Confirm current REET brackets and examples on the DOR website
- Keep copies of filings, receipts, and exemption documentation
Next steps
Washington’s REET is manageable once you understand how the tiered schedule works and which transfers are exempt. The key is to confirm current rates with the Washington Department of Revenue, involve your title company early, and coordinate with your attorney on estate or trust transfers.
If you want help estimating your net proceeds, discussing listing strategy, or navigating an estate sale in Fircrest or greater Pierce County, schedule a Free Consultation with Greg Pubols. We can connect you with the right local professionals and provide a clear, step‑by‑step plan.
FAQs
Who pays Washington’s REET in a standard home sale?
- The seller typically pays REET, though a contract can shift it to the buyer; title or escrow usually collects and remits it at closing.
How do the tiered REET rates work in Washington?
- Washington uses a progressive schedule where portions of the sale price fall into tiers and are taxed at the rate for that tier; confirm current brackets on the DOR REET page.
Do heirs owe REET when they inherit a home in Pierce County?
- A transfer by inheritance without a sale may be exempt, but a subsequent sale by the estate or the heir is usually taxable; review RCW 82.45 and consult probate counsel.
Are transfers into a living trust subject to REET?
- Some transfers into or out of a trust are exempt when there is no change in beneficial ownership; the specifics depend on facts and documentation, so confirm with DOR and your attorney.
Will my title company handle REET filing and payment?
- In most Pierce County closings, yes; title or escrow collects the tax and files the required forms with payment.
Where can I find current REET rates and forms?
- The Washington Department of Revenue’s Real Estate Excise Tax page has current brackets, examples, filing instructions, and forms.
How can I estimate my net proceeds with REET included?
- Ask your local broker or title company for a net sheet that includes an estimated REET line, then confirm the figures using the DOR’s current tier schedule.
