Why luxury homes, pricey properties are going on the market in King County
Jul 11, 2019, 5:45 AM
File photo of houses for sale in Seattle's Laurelhurst neighborhood. ()
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Windermere’s chief economist is noticing a significant number of high-end properties coming onto the market in King County.
鈥淥n the residential side we鈥檝e already seen a fairly significant uptick in King County of listings above $1.5 million,鈥� told 成人X站 Radio’s Dave Ross. 鈥淚 think there are some people who are aware of this.鈥�
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They’re aware that the Washington State Real Estate Excise Tax will go up after 2019 — at least it will go up for the more expensive properties. That’s created a bit of a race to get properties on the market and close before Jan. 1, 2020.
The Washington State Real Estate Excise Tax is paid by those who sell a house or conduct commercial transactions. A total of 1.28 percent of the sale price goes to the state, and another half percent goes to city. So 1.78 percent altogether.
鈥淲ell they鈥檝e now made it a sliding scale,鈥� Gardner said. 鈥淚f you sell your house at $500,000 or lower, it鈥檚 dropped down to 1.1 percent (1.6 percent in the end). The portion between $500,000 and $1.5 million is taxed at the existing rate.鈥�
鈥淗ere鈥檚 the kicker, it starts ratcheting up above that $1.5 million level,鈥� he said.
Properties sold between $1.5-3 million are taxed at 2.75 percent (3.25 after city tax). Then 3.5 percent for anything sold above $3.5 million. The tax is basically targeting luxury homes and expensive properties.
鈥淚n essence, this will not affect 80 percent of homes in Washington state,鈥� Gardner said. 鈥淲e鈥檙e taxing the rich, essentially.鈥�
Commercial property is where things get 鈥渞eally heavy鈥� Gardner said. If an owner of a $50 million apartment building or a hotel sells a property, for example, they would currently be charged about $890,000 in excise taxes. Under the new rate, they would pay $1.72 million.
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鈥淪o it wouldn鈥檛 surprise me if we see some commercial buildings come on the market earlier to try and sell before the deadline,鈥� he said, further noting that King County is already seeing more luxury properties come on the market.
“For most of us, we鈥檒l actually be getting some money back,鈥� he added. 鈥淗owever, the high end of the market, they will be paying significantly more.鈥�
