By Genaro Shaffer, Bellwether Real Estate — Updated May 2026
Washington’s Real Estate Excise Tax (REET) is one of the largest single costs of selling a home in WA. It’s also one of the most-misunderstood. After 11 years of closing transactions in Bellingham, here’s the honest guide.
What is REET?
REET is Washington’s state-and-local tax on real estate sales. Sellers pay it at closing. Not buyers.
It’s collected by the County and remitted to Washington State + local jurisdiction.
The 2026 graduated brackets
WA REET uses a graduated bracket structure — meaning different portions of the sale price are taxed at different rates.
| Sale price portion | State rate |
|---|---|
| $0 – $525,000 | 1.10% |
| $525,001 – $1,525,000 | 1.28% |
| $1,525,001 – $3,025,000 | 2.75% |
| Above $3,025,000 | 3.00% |
Plus local REET — typically 0.25-0.50% added by cities/counties. Most Whatcom County is 0.50%.
These brackets are stable through Dec 31, 2026 per current Washington statute.
How the math actually works
For a $700,000 Bellingham home sale:
Step 1: First $525,000 at 1.10% = $5,775 (state) Step 2: Remaining $175,000 ($525,001-$700,000) at 1.28% = $2,240 (state) State total: $5,775 + $2,240 = $8,015
Step 3: Local REET — full $700,000 at 0.50% = $3,500 (local)
Total REET on $700,000 sale: $8,015 + $3,500 = $11,515 (about 1.65% of sale price)
For a $1,400,000 Bellingham home sale:
Step 1: First $525,000 at 1.10% = $5,775 Step 2: Next $875,000 ($525,001-$1,400,000) at 1.28% = $11,200 State total: $5,775 + $11,200 = $16,975
Step 3: Local 0.50% × $1,400,000 = $7,000
Total REET on $1,400,000: $16,975 + $7,000 = $23,975 (about 1.71% of sale price)
For point-and-click calculation: WA REET Calculator.
Who actually pays REET
Sellers pay REET at closing. Per Washington statute.
But it affects buyer-seller negotiations:
- Sellers price their listing aware of REET they’ll pay
- In aggressive seller markets, sellers can effectively pass REET through to buyers via higher prices
- In aggressive buyer markets, sellers absorb REET as a cost of selling
For buyer planning: REET doesn’t appear on your closing disclosure but affects the seller’s bottom line + therefore your negotiation dynamics.
Exemptions
REET applies broadly but exemptions exist:
- Gifts of real estate (no consideration paid)
- Inheritance through estate process (no sale)
- Divorce property transfers (court-ordered)
- Transfers to trusts (no change in beneficial ownership)
- Foreclosure transfers to lender (specific rules)
- Some affordable housing transactions
Each exemption has specific requirements. Verify with a real estate attorney before assuming exemption applies.
Common REET mistakes
Mistake 1: Assuming REET is a flat percentage. Reality: Graduated. Different price brackets taxed differently.
Mistake 2: Confusing REET with property tax. Reality: Different. REET is one-time at sale; property tax is annual.
Mistake 3: Forgetting local component. Reality: State + local. Local rate varies — most Whatcom areas 0.50%.
Mistake 4: Wrong county. Reality: Local REET varies. Verify for specific property address.
Mistake 5: Not budgeting REET in net-proceeds calculation. Reality: Sellers should include REET in their net-to-seller math from the start.
REET for different transaction types
Standard sale: REET applies normally.
Sales below appraisal value: REET on actual sale price, not appraisal.
1031 exchanges: REET applies; specific tracking requirements.
Seller-financed sales: REET on full purchase price at closing, regardless of payment schedule.
Bulk sales / portfolio sales: Each property’s REET calculated separately.
Property transferred via LLC ownership change: Complex — controlled-interest transfer rules may trigger REET. Verify with attorney.
How to estimate your REET
For most Whatcom County sales:
Quick rule of thumb: ~1.6-1.7% of sale price for homes between $525K and $1.5M.
For precise calculation: WA REET Calculator — pick your county + enter sale price, get exact graduated calculation.
REET in your seller closing math
Typical seller costs at closing:
- Real estate commission: 5-6% of sale price
- REET: 1.6-3.5% of sale price (graduated)
- Title insurance (seller pays owner’s): ~0.5%
- Escrow fees: $1,000-$3,000
- Recording fees: ~$200
- Mortgage payoff (if applicable)
- Negotiated repair credits (if applicable)
For a $700K sale: REET represents about $11,500 of your closing costs. Plan for it.
When do brackets change?
Current brackets effective January 1, 2023 through December 31, 2026. Washington legislature can adjust brackets at next legislative session.
Verify current rates before closing if your sale crosses a year boundary or if you’re reading this materially after May 2026.
FAQ
Do buyers pay REET? No — sellers pay. But buyers do pay other closing costs.
Is REET tax deductible? For sellers, REET is a selling cost reducing taxable capital gain. Consult CPA.
What’s the highest REET bracket? 3.0% state + local on portion above $3,025,000.
What’s a typical Bellingham REET cost? ~$11,000-$12,000 on a $700K sale.
Does REET apply to commercial sales? Yes — same brackets.
Does REET apply to land sales? Yes — same brackets.
Can I avoid REET? Only through legitimate exemptions (gifts, inheritance, divorce transfers, etc.). Verify with attorney before assuming.
When do I pay REET? At closing. Title/escrow company collects and remits.
Has REET always been graduated? No — graduated structure took effect January 1, 2020.
Are local rates the same statewide? No — vary by city/county. Most Whatcom is 0.50%.
Use the calculator
For your specific number: WA REET Calculator — instant graduated calculation with all 2026 brackets.
Talk to Genaro about selling
📞 (360) 389-6616 · ✉️ genaro@bellwetherrealestate.com
For broader seller context: Sell Your Bellingham Home.
Don’t go generic — go with Genaro.
Genaro Shaffer · WA Broker #27119 · Bellwether Real Estate · 11+ years · 67+ transactions · 5.0 Zillow 📞 (360) 389-6616, Bellingham WA 98225 Powered by Bellwether Real Estate · Member NWMLS · Equal Housing Opportunity
This is real estate guidance, not tax or legal advice. Verify specific REET applicability with a real estate attorney or CPA before transaction.