What taxes are involved in the purchase of a home?

When buying a home in Washington, there are several taxes to keep in mind. The first is the real estate excise tax, which is applied to the sale price of the home. This tax is paid by the seller, but it is typically passed on to the purchaser. The second tax is the personal property tax, which is an annual fee paid by the homeowner. This fee is based on the assessed value of the property and is usually paid in two installments. Additionally, some cities and counties in Washington may have their own taxes that must also be paid, such as local Improvement Districts (LIDs) and Utility Local Improvement Districts (ULIDs). Finally, there may be other special taxes called “assessment” or “fee-in-lieu of” taxes, which are due at closing. It is important to consult an experienced real estate law attorney before settling on a purchase or sale of a home to determine the total amount of taxes that may be due. The attorney can provide advice on how to minimize the burdensome taxes and determine the best course of action to protect your interests.

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