Washington real estate: property tax, closing costs & insurance
Washington replaced a flat real estate excise tax with a graduated state schedule that tops out at 3% on the highest-value tier, on top of local additions — and importantly, Washington exempts most direct real estate sale gains from its capital gains excise tax entirely.
Property tax in Washington
The effective rate runs about 0.87% of assessed value. Levy growth capped at 1%/yr per district.
Transfer tax & closing costs
Graduated state REET (seller) + local 0.25–0.5%. Recording runs a flat $300. Title insurance is customarily paid by the seller, with a minimum owner’s premium of $350.
Insurance & capital gains
Cascadia seismic zone. 7% excise on LTCG >$270k; real estate is EXEMPT — use 0 for direct property sales.
Worked example: a $350,000 ARV flip in Washington
Six-month hold, $45,000 rehab, 15% target profit margin, all-cash. This is the same reverse waterfall the calculator runs — see it live for your actual property.
- After-repair value$350,000
- Rehab budget−$45,000
- Closing costs — acquisition−$5,875
- Closing costs — disposition−$20,150
- Holding costs, 6 months−$2,540
- Target profit, 15%−$52,500
- Maximum Allowable Offer$223,935
If you’re investing
The graduated REET schedule means price matters for the tax rate itself, not just the dollar amount — a deal priced just above a bracket line ($525,000, $1,525,000, $3,025,000) pays a higher marginal rate only on the portion above that line, so model it as a true bracket, not a flat percentage.
If this is your home
Washington’s 7% capital gains excise tax applies to certain investment gains but real estate sale proceeds are specifically exempted — don’t double-count that exposure when budgeting your eventual exit.
Best suited for: Investors targeting mid-market price points where the REET brackets stay favorable, and no state income tax on rental cash flow.
Washington FAQ
What is the Washington State real estate excise tax (REET) rate?+
It’s graduated: 1.1% up to $525,000, 1.28% from there to $1,525,000, 2.75% up to $3,025,000, and 3.0% above that, plus a local rate that typically adds 0.25–0.5%. The seller customarily pays it.
Does Washington tax capital gains from a home sale?+
Washington’s 7% capital gains excise tax specifically exempts real estate sales, so proceeds from selling investment property are not subject to it even though other investment gains can be.
See the exact number for your Washington property
Free for your first three properties. No credit card.
Other state guides
Sources: state and county assessor publications, state department of revenue transfer-tax schedules, and title-rate manuals filed with each state’s insurance regulator, effective 2025-01-01. Figures are estimates for planning purposes, not tax or legal advice — confirm with a licensed professional before closing. How the calculator works