Prorations Reet

Washington Closing Costs — REET and Prorations ## Real Estate Excise Tax (REET) Washington imposes a Real Estate Excise Tax (REET) on all real property sales, paid by the seller at closing. REET is one of the most heavily tested Washington-specific financial topics on the state exam. Since January 1, 2020, REET uses a graduated rate structure: | Price Bracket | Rate | |---------------|------| | Up to $525,000 | 1.10% | | $525,001 to $1,525,000 | 1.28% | | $1,525,001 to $3,025,000 | 2.75% | | Over $3,025,000 | 3.00% | How to calculate: Apply each rate only to the amount within that bracket (like income tax brackets). > Example — Sale price $900,000: > - First $525,000 × 1.10% = $5,775 > - Next $375,000 ($525,001–$900,000) × 1.28% = $4,800 > - Total REET: $10,575 > Example — Sale price $1,800,000: > - First $525,000 × 1.10% = $5,775 > - Next $1,000,000 ($525,001–$1,525,000) × 1.28% = $12,800 > - Next $275,000 ($1,525,001–$1,800,000) × 2.75% = $7,562.50 > - Total REET: $26,137.50 ## Property Tax Prorations Washington property taxes are paid in arrears — the 2024 tax bill is paid in 2025. At closing, the seller owes the buyer a credit for the portion of the current tax year the seller owned the property. Formula: 1. Daily rate = Annual taxes ÷ 365 2. Seller's days = January 1 through day before closing 3. Credit to buyer = Daily rate × Seller's days > Example: Annual taxes $6,570. Closing October 1. Seller owned Jan 1–Sep 30 (273 days). > Daily rate: $6,570 ÷ 365 = $18.00/day > Seller's credit to buyer: 273 × $18 = $4,914 The buyer…