A Washington real estate broker is explaining REET to a client who is comparing Washington's transfer tax to the flat transfer tax used in neighboring Oregon. Which statement most accurately distinguishes Washington's REET from a typical flat-rate transfer tax?
Correct Answer
B) Washington's REET is a graduated tax where higher-priced properties are taxed at progressively higher rates on each portion, unlike a flat-rate tax that applies one rate to the entire price
Washington's REET under RCW 82.45 is a graduated (tiered) tax, meaning different rates apply to different portions of the sale price, similar to how federal income tax brackets work. A flat-rate transfer tax, by contrast, applies a single uniform percentage to the entire sale price. Washington's structure means that a seller of a $2,000,000 property pays 1.1% on the first $525,000, 1.28% on the next $1,000,000, and 2.75% on the remaining $475,000 — not a single flat rate on the whole amount. This is the key structural distinction.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
Homestead portability allows homeowners to transfer a portion of their accumulated homestead tax savings to a new homestead in the same state.
The income approach estimates a property's value based on the income it generates by converting net operating income into a value estimate using a capitalization rate. It is the preferred method for income-producing properties.
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- → The income approach to appraisal is most commonly used for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → External obsolescence in Oklahoma:
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → Which formula best represents the cost approach to appraisal?
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