Washington Excise Tax and the Active Military

By
Services for Real Estate Pros with Connolly Tacon & Meserve

Washington's real estate excise tax is among the highest in the nation, and anyone who has participated in the purchase or sale of real property likely knows of the process or at least remembers seeing it listed as a line item somewhere in the transaction.  In Washington this tax can be found under RCW 82.45 and 82.46.

Last year House Bill 1308 was introduced on January 16th, 2007 that would create an exemption for homes sold by active duty military members as a result of military relocation orders.  Some of the additional conditions include that the property must have been the primary residence of the active military member, and the property must have been purchased within 5 years of the relocation and sold within 12 months following the order.  Sadly, however the bill never made it out of the finance committee.

This year the bill was reintroduced, and continues to sit.  According to the Financial Note included with the bill the State would lose out on about $5.3 million in 2008 and $8.6 million in 2009.  While this might seem like a lot, when you review the overall budget it doesn't seem to be that big of a percentage of the overall budget (less than 0.01%)

Is less than a tenth of a percent to much for our troops that are simply being reassigned?  Troops who are willing to go where they are sent?  I for one believe that this is one exemption that could be granted in order to ease the burden on troops being relocated.

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Rainmaker
640,198
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro
Jonathon, I hope the bill makes it through this time.  I agree with you if the troops are being relocated they really don't have a say as Uncle Sam tells them where to go and if this bill passes it sounds like it would ease their burden. 
Feb 03, 2008 06:56 PM #1
Rainmaker
46,013
Sarah Nopp
South Sound, WA
I just had a conversation with a family PCSing here from a Kentcuky base. The idea that they would have to pay an additional (nearly) 2% when they sell, means they will instead rent. With only 18 to 36 months stationed at Ft Lewis, it just makes little sense to purchase.
Feb 06, 2008 12:51 AM #2
Rainmaker
292,545
Sandy Nelson
Riley Jackson Real Estate Inc. - Olympia, WA
your Olympia area Realtor

Jonathan,

I agree with you. The money is better placed in the pocket of a military family on reassignment orders than in the coffers of the state of Washington. These families carry immense burdens and hardships for our country. Exempting them from the excise tax is just a small bandage.

Sandy

Feb 06, 2008 09:43 AM #3
Ambassador
537,603
JO SOSS
HOMEFRONT Realty - Bremerton, WA
Kitsap County WA Real Estate - HOMEFRONT Realty
Jonathan, thanks for the update! As a military family we have had to make really tough choices when it comes to real estate and this would lessen our risk.
Feb 07, 2008 08:20 PM #4
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Steve
Thanks for the info.  As a military member, I've been fighting this battle for the past couple of months.  I moved up here back in the Sum of '06, was told I would be here for 4 yrs and I've just received orders to ship out again in Sum '08.  Our family bought a house here (thinking I would be here for the 4 yrs) but now it's only 2 yrs.  Due to housing "crunch", I'm estimating that I'll loose ~$30K with ~$6K of that going to the state of Wa.  It's not fair, but that's the price I'll pay for not being being wiser when it comes to Wa law.  Hopefully, the Wa lawmakers can mover quick on this but I'm expecting the worse.  Thanks to all above with comments of support.  V/r...Steve 
Feb 08, 2008 12:09 PM #5
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Richard

If the bill passes, do you know if it would include active duty military that are completing their active duty service (final orders, honorable discharge)?

Richard

Aug 26, 2008 12:36 AM #6
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Rainer
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Jonathan Sprouffske

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