Changes to Real Estate Taxes Could Impact Your Selling Plans

In the last legislative session, a new graduated Real Estate Excise Tax (REET) structure was implemented which will replace the current 1.28 percent sales tax. The new tiered-structure will feature a variable rate that is based off your property’s value.

The changes to this structure impact sellers differently depending on the value of their home. For homes priced below $500,000, the tax rate will drop to 1.1 percent. Those with homes priced at the $1.56 million range will lean towards a break-even point, while sellers priced above $1.56 million will be subject to much larger REET sums.

To help calculate your expected REET tax, Realogics Sotheby’s International Realty has created an excise tax calculator allowing you to compare 2019 versus 2020 REET costs. For sellers on the fence about putting their home on the market, the new changes to this structure are helpful to be aware of as the cost savings could be significant. It's important to note, that unimproved property such as vacant land, agriculture, and timber parcels are still subject to the old tax rate and will not be impacted by this change.

Since changes don’t go into effect until January 1st, 2020, there is still time to speak with an agent about getting your home on the market.