According to data from the state Department of Revenue (DOR), the month before the state’s new law restructuring the real estate excise tax (REET) took effect the state collected almost twice the amount in REET revenue than it did during the same time period the previous year.
In December 2019, the REET generated $182.7 million in revenue, compared to $94.8 million in December 2018. The second-highest amount for that month in the past five years was $104.1 million in 2017.
Under the new law, the 1.28 percent flat rate was replaced with a graduated rate determined by property sales prices ranging from 1 percent for properties under $500,000 to 3 percent on properties worth more than $3 million. Developers have warned that the restructured tax will affect commercial real estate the most and could shift investments away from Washington and to other states with lower REET rates. Developers also anticipated strong commercial sales in December to avoid the new tax rate.
In the Nov. 5 election, voters rejected the REET law by roughly 65 percent in an advisory vote.