Seattle’s Millionaire Tax — What Homeowners Need to Know
Washington State made national headlines in March 2026 when Governor Ferguson signed SB 6346 into law — a 9.9% tax on household income above one million dollars. If you own a home in the Seattle area, your first thought was probably: does this affect me if I sell my house?
The short answer is no — real estate sales are exempt. But there’s more to the story, and understanding how this new tax sits alongside Washington’s existing tax landscape is worth your time whether you’re thinking about selling now or down the road.
What Is the Millionaire Tax?
SB 6346 establishes a 9.9% state tax on adjusted gross income exceeding one million dollars per household. Married couples and domestic partners share a single million-dollar standard deduction. The tax takes effect January 1, 2028, with the first returns and payments due in 2029.
Washington has long been known as a state with no income tax. This law changes that for high earners, and the revenue — estimated at $3.5 to $3.7 billion annually — is earmarked for education, healthcare, small business B&O tax relief, and consumer sales tax reductions.
Does It Apply to Selling Your Home?
No. Real estate sales are specifically and statutorily excluded from the tax base. Even if your home sale generates millions in proceeds, those proceeds do not count toward the one million dollar income threshold that triggers the tax.
This is a significant carve-out, especially in the Seattle metro where median home prices regularly exceed $800,000 and many homeowners have seen substantial appreciation over the past decade. A homeowner selling a $2 million property at a $1 million gain would owe nothing under this new tax on that gain.
What About Washington’s Capital Gains Tax?
Washington also has a separate 7% capital gains excise tax that’s been in effect since 2022. It applies to long-term gains on assets like stocks, bonds, and business interests above a standard deduction (currently around $278,000, adjusted annually for inflation).
Here’s the important part: real estate sales are also exempt from this tax. The capital gains excise tax explicitly excludes the sale or exchange of real property — primary residences, investment properties, commercial real estate, all of it.
So between the new millionaire tax and the existing capital gains tax, home sellers in Washington are protected from both at the state level.
Taxes That Do Apply When You Sell a Home in Seattle
While the millionaire tax and capital gains tax won’t touch your home sale, there are other taxes to be aware of.
Real Estate Excise Tax (REET)
Washington’s Real Estate Excise Tax is a transaction-based tax on the sale price of the property. It’s graduated by price tier:
- Under $525,000: 1.1% state rate
- $525,000 – $1,525,000: 1.28%
- $1,525,000 – $3,025,000: 2.75%
- Over $3,025,000: 3.0%
On top of the state rate, local jurisdictions add their own REET. In Seattle, the local rate is 0.5%, bringing the combined rate to between 1.6% and 3.5% depending on the sale price. REET is typically paid by the seller and is due at closing.
Federal Capital Gains Tax
The federal government does tax gains from home sales, but most primary residence sellers qualify for a generous exclusion: $250,000 for single filers and $500,000 for married couples filing jointly. To qualify, you need to have owned and lived in the home for at least two of the last five years before the sale.
Gains above the exclusion amount are taxed at federal long-term capital gains rates, which range from 0% to 20% depending on your income bracket.
Why This Matters for Seattle Homeowners
The millionaire tax has created uncertainty in the market, and some homeowners are making decisions based on fear rather than facts. Here’s what we’re seeing on the ground.
High-value home listings in King County are surging. Data from the Northwest Multiple Listing Service shows that compared to the same period last year, new listings for homes over $5 million are up 40%, pending sales up 78%, and closed sales up nearly 67%. Some of that activity is driven by homeowners who want to simplify their financial picture before the tax takes effect — even though the home sale itself isn’t taxed.
At the same time, the broader Seattle market has cooled slightly. Active listings are up 29% year over year, while closed sales have been essentially flat. The median sales price has dipped about 1.5%.
For homeowners considering a sale, the key takeaway is this: don’t let tax confusion drive a bad decision, but don’t ignore the market signals either. The real estate exemptions are real and significant. But if you’re already thinking about selling, the current market conditions — more inventory, motivated buyers at the high end — may work in your favor.
Thinking About Selling Your Seattle Home?
Whether the millionaire tax is on your radar or you’re dealing with a completely different situation — a property that needs work, a rental you’re ready to move on from, a home you’ve inherited — we can help you understand your options.
Georgia Buys makes fair cash offers on homes throughout the Seattle metro area. No repairs, no agents, no waiting. If you want to explore what a fast, straightforward sale looks like, get a cash offer today or give us a call.
