Govenor's Sneaky New Tax
By Jim Palmer Jr.

Even though Washington State ranks about 28th in the US in terms of overall tax rates, the legislature recently teamed up with Governor Inslee to pass a new tax hike on recording fees for certain legal documents (SHB 1474) that will be the highest in the nation for that type of tax.  This is in addition to the last increase (HB 1277) that was levied a couple years ago. The average recording fee for a real estate transaction has been between $300 and $400, but the new increase will add $100 to that amount.  This new increase quietly went into effect on January 1, 2024.

Supposedly, the increased funds will be used to create the Covenant Homeownership Account and program to address the history of housing discrimination due to racially restrictive real estate covenants in Washington State.

Jennifer Richter, at the Yakima County Auditor Office said, “Washington is one of the highest, if not the highest in the nation now, for recording a document, and you can’t not record. If you buy a house, you have to record a deed and you have to record the loan documents so you’re going to have to pay the fees.”

For any document, the first page will now be $303.50 and $1 for each additional page.  Documents which contain two or more titles and/or two or more transactions requiring multiple indexing will be recorded individually.  In other words if a person purchased two lots the fee would be $911.50 at a minimum. 

That might give sticker shock to some, but for most people who don’t do real estate transactions frequently, that fee will likely get buried in the mix and go largely unnoticed.

In a case last year, a land owner was required by the purchaser to remove two lots from the Current Use Tax designation at closing and those documents had to be recorded separately from the real estate closing transaction.  That meant they paid almost $2,000 just for recording fees to the county for a small land transaction. 

Certain documents are excluded from this fee, such as government liens, but most documents in a normal real estate transaction are not exempt and are affected adversely by this new sneaky tax.  Ask your professional broker to provide a cost estimate for your share of the closing costs that should include these new recording fees so you are not blindsided by this cost.