Washington Administrative Code › Title 458 - Revenue, Department of › Chapter 458-61A - Real estate excise tax › GENERAL INFORMATION AND TAXABILITY OF TRANSFERS › Section 458-61A-102 - Definitions

Current through Register Vol. 24-14, July 15, 2024
For the purposes of chapter 458-61A WAC, the following
				  definitions apply unless the context requires otherwise:
(1)
"Affidavit"
means the real
				estate excise tax affidavit provided by the department for use by taxpayers in
				reporting transfers of real property. Both the seller/grantor and the
				buyer/grantee, or their agents, sign the affidavit under penalty of perjury.
				The term also includes the form used to report to the department transfers and
				acquisitions of a controlling interest in an entity owning real property in
				this state under WAC
				458-61A-101.
(2)
"Agricultural land"
means
				farm and agricultural land and farm and agricultural conservation land, as
				those terms are defined in
				RCW
				84.34.020, including any structures on such
				land.
(3)
"Consideration"
means money or anything of value, either tangible
				or intangible, paid or delivered, or contracted to be paid or delivered,
				including performance of services, in return for the transfer of real property.
				The term includes the amount of any lien, mortgage, contract indebtedness, or
				other encumbrance, given to secure the purchase price, or any part thereof, or
				remaining unpaid on the property at the time of sale. For example, Lee
				purchases a home for $250,000. He puts down $50,000, and finances the balance
				of $200,000. The full consideration paid for the house is $250,000.
(a) "Consideration" includes the issue of an
				ownership interest in any entity in exchange for a transfer of real property to
				the entity. For example, if Julie transfers title to 20 acres of commercial
				property to Smith Development, LLC in exchange for a 50% ownership interest in
				the company, that constitutes consideration for the transfer. In the case of
				partnerships, consideration includes the increase in the capital account of the
				partner made as a result of the partner's transfer of real property to the
				partnership, unless the transfer is otherwise specifically exempt under WAC
				458-61A-211
				or
				458-61A-212.
(b) "Consideration" includes the assumption
				of an underlying debt on the property by the buyer at the time of transfer. For
				example, Ben buys a residence, valued at $300,000, from Liza. Liza was
				purchasing the property on a real estate contract that has an outstanding
				balance of $175,000. Ben gives Liza $125,000 in cash and he assumes the
				obligation on the real estate contract, which Liza assigns to him. Real estate
				excise tax is due on $300,000, which is the total consideration for the
				sale.
(c) "Consideration" does not
				include the amount of any outstanding lien or encumbrance in favor of the
				United States, the state, or a municipal corporation for taxes, special
				benefits, or improvements. For example, Mel buys residential property for
				$300,000. The title is encumbered by a lien for unpaid property taxes in the
				amount of $12,000, and a lien for municipal sidewalk improvements in the amount
				of $6,000. Although Mel will become liable for those liens in order to take
				title to the property, they are not considered part of the purchase price for
				the purpose of calculating real estate excise tax. The real estate excise tax
				is due only on the purchase price of $300,000.