A Washington seller is closing on the sale of her home for $526,000. Her broker estimates the REET using only the 1.1% first-tier rate on the full amount. A more experienced colleague corrects the broker. What is the correct REET calculation method for this transaction?
Correct Answer
D) Apply 1.1% to the first $525,000 and 1.28% to the remaining $1,000 above the threshold
Washington's REET under RCW 82.45 is a true graduated tax, meaning each tier rate applies only to the portion of the price within that tier — not to the entire sale price. For a $526,000 sale: Tier 1 applies 1.1% to the first $525,000 = $5,775.00; Tier 2 applies 1.28% to the remaining $1,000 ($526,000 − $525,000) = $12.80. Total REET = $5,787.80. The first broker's error was treating the entire amount as if it fell within one tier — a common mistake that mirrors a misunderstanding of how progressive tax structures work.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
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