When you convey property in Washington via a quitclaim deed, you should account for the various filing costs and other fees so you know what to expect. The grantor and grantee may face tax implications depending on the property’s value and other factors when the conveyance involves more than nominal consideration.
Filing Fees
Wash. Rev. Code § 58.24.070 lets each county auditor charge filing and recording fees. They will vary by county. Each county may charge additional pages after the base recording fee.
For example, Spokane County, King County, and Pierce County all charge $303.50 to record a quitclaim deed and $1 for each additional page in the document.
Taxes
1. Real Estate Excise Tax
Washington imposes a real estate excise tax (REET) on property sales. The grantor (the property seller) usually pays the tax. The different types of REETs break down into state and local versions as follows:
- A statewide real estate excise tax, per Wash. Rev. Code § 82.45.060, applies in these circumstances:
- 1.1 percent for sales up to $500,000.
- 1.28 percent for sales between $500,001 and $1,500,000.
- 2.75 percent for sales between $1,500,001 and $3,000,000.
- 3 percent for sales over $3,000,000.
- 1.28 percent for all timberland or agricultural land sales.
- A local real estate excise tax, per Wash. Rev. Code § 82.46.010, allows all Washington cities to levy a 0.25 percent tax on property sales.
- Another local real estate excise tax, per Wash. Rev. Code § 82.46.035, allows municipalities planning under the Growth Management Act (GMA) to levy an additional 0.25 percent tax on property sales.
Exemptions to Excise Tax
Because many situations when Washingtonians may use quitclaim deeds are less formal than other property transfer methods, the scenarios may be tax-exempt. Exempted situations include:
- Gifts or inheritances of property.
- Transfers involving community property.
- Transfers of property during the dissolution of a marriage or domestic partnership.
- Transfers of property due to a legal separation.
- Tenants in common and joint tenants transferring property among one another.
- Changes in identity or form of ownership, such as transfers between family corporations and partnerships.
- Transfers where the Internal Revenue Code doesn’t recognize the capital gain.
- Quitclaims solely aimed at clearing, correcting, or adding to a property title.
An explanation of these and other exemptions is available in the Wash. Admin. Code Ch. 458-61a.
2. US Gift Tax
Washington state has no gift tax, but the federal government does. If you implement a quitclaim deed to transfer property as a gift, use IRS Form 709 to file for and pay your federal gift tax.
The IRS adjusts the gift tax limit annually, allowing grantors to give up to a certain amount of property value without paying tax. For example, for 2024, the annual gift tax limit is $18,000 per individual or $36,000 per couple. An individual or couple must adhere to this annual limit for an unrestricted number of recipients, but they can’t exceed their lifetime limit.
3. Capital Gains Tax
Washington’s capital gains tax does not apply to the sale or transfer of real estate. The grantor doesn’t have to pay capital gains tax regardless of factors like how long they owned the property, its location, whether it was their primary residence, or the property type.
The US government, however, collects capital gains tax on property transfers. Access IRS Topic No. 409 and IRS Publication 551 to learn about valuation, exemptions, and payment processes for US capital gains taxes.
