Buying and selling a home often comes with unexpected costs. Excise tax can be one of those surprises. According to the King County website, excise tax is, very simply put, a tax on the sale of real estate. In Seattle, that tax is 1.78% of the sales price. That may not sound like a very high number, but if you factor in that the average price of a home sold in Seattle is $350,000, that is an extra $6,230 expense.
The real estate excise tax is typically paid by the seller of the property, although the buyer is liable for the tax if it is not paid. This can be translated many ways. In a traditional sale, where the property that is being sold is not distressed, the seller pays for the excise tax out of the net proceeds. In a few of the bank owned sales I have been involved with recently, the bank has required the buyer to pay the excise tax. Long story short, excise tax is another line item in the complex process of buying and selling real estate. If you are seller, make sure to factor the tax into your net proceeds. If you are a buyer, make sure to ask your Realtor about the excise tax and if you will be responsible for paying it.