Is a Medina seller better off pushing a closing from December into January? The question is fair. The Washington Department of Revenue has published new thresholds for the state's graduated real estate excise tax, and they apply to sales starting January 1, 2027. When a tax table changes on a fixed date, it is natural to wonder whether the calendar is worth managing.
At Medina price points the answer is a number, and it is small: about $494. The rule that keeps it small also explains why the 3% top rate now takes a larger share of a Medina sale than its designers likely pictured in 2019.
What Changes on January 1
On January 1, each dollar band moves up while the four rates stay fixed.
| Portion of the selling price | Rate | Bands through Dec. 31, 2026 | Bands from Jan. 1, 2027 |
|---|---|---|---|
| First tier | 1.10% | Up to $525,000 | Up to $551,000 |
| Second tier | 1.28% | $525,000 to $1,525,000 | $551,000 to $1,551,000 |
| Third tier | 2.75% | $1,525,000 to $3,025,000 | $1,551,000 to $3,051,000 |
| Top tier | 3.00% | Above $3,025,000 | Above $3,051,000 |
These are marginal bands. Each rate applies only to the slice of the price that falls inside its band, the same way income tax brackets work. Every boundary moves up by $26,000. For a sale above $3,051,000, three slices of $26,000 each slide down into a cheaper tier:
- $26,000 moves from 1.28% to 1.10%, which saves $46.80
- $26,000 moves from 2.75% to 1.28%, which saves $382.20
- $26,000 moves from 3.00% to 2.75%, which saves $65.00
Together that comes to $494 in state excise tax, and it is the same $494 whether the home sells for $3.2 million or $12 million. Medina's local excise tax does not change with the reset, so the local share of the bill stays put.
Why the Number Is So Small
The reason is in the statute. Under RCW 82.45.060, every four years the first threshold is adjusted by the growth of the consumer price index for shelter or 5%, whichever is lower. If shelter costs fall, the threshold does not move. The upper thresholds follow a different rule:
"The department must adjust the selling price thresholds in subsection (1)(b)(ii) through (iv) of this section by the dollar amount of any increase in the selling price threshold in subsection (1)(b)(i) of this section."
So the $3 million threshold is not indexed by percentage. It inherits the dollar increase of the $500,000 threshold. A 5% raise on half a million dollars becomes a raise of under 1% at the top of the table.
The history makes this concrete. The legislature created the graduated structure in 2019 through ESSB 5998, effective January 1, 2020, with bands at $500,000, $1.5 million and $3 million. After two adjustments, the first threshold has risen $51,000, or about 10%. The top threshold has risen by the same $51,000, which on $3 million is about 1.7%.
Over roughly the same stretch, Windermere's Bellevue Commons office reported an Eastside median single-family sale price of $900,000 for November 2019 and $1,445,721 for August 2026, a gain of about 61% across two different months. The August 2026 Eastside median now sits only about $79,000 below the line where the 2.75% tier begins. Prices moved in percentages. The upper brackets moved in small dollar steps.
What the 3% Tier Covers in Medina Now
Medina also levies a local excise tax of 0.50%. It appears in the Department of Revenue's local rate table effective May 1, 2026, and is added on top of the graduated state tax. That puts the combined marginal rate at 3.5% on every dollar above the top threshold.
King County's assessor reports Medina as part of a combined area. The closest official figure is King County's 2026 annual update for Area 33, which groups Medina with Clyde Hill, Hunts Point and Yarrow Point. Across 347 improved sales from 2023 through 2025, time-adjusted to January 1, 2026, the mean sale price was $5,465,500. Here is how the 2026 schedule applies at three price points, including that mean:
| Sale price | State REET | Medina 0.50% | Combined | Effective rate | Share of price in the 3% tier |
|---|---|---|---|---|---|
| $3,000,000 | $59,138 | $15,000 | $74,138 | 2.47% | None |
| $5,465,500 | $133,040 | $27,328 | $160,368 | 2.93% | About 45% |
| $11,600,000 | $317,075 | $58,000 | $375,075 | 3.23% | About 74% |
At the Area 33 mean, almost half of the sale price sits in the top bracket, and that slice produces about 55% of the state tax. In 2019 the 3% rate was framed as the tier for the highest-priced transactions. On the Points it now covers a large share of an ordinary sale.
The Gables as a Worked Example
The bottom row is not hypothetical. In June 2026, The Seattle Times reported the sale of The Gables, a 1908 home on Overlake Drive described as the oldest home in Medina along Lake Washington's eastern shore, for nearly $11.6 million. The home is 8,570 square feet on a 0.75-acre lot. At that price the combined excise tax comes to roughly $375,000. The January reset would have trimmed $494 from it.
The same report puts a much larger number next to that one. The home was first listed at $14.1 million in July 2024, which is about $2.5 million above where it sold. Because every dollar in the top band is taxed at 3.5% combined, the excise tax moves with the price. Each $100,000 of price difference changes the bill by $3,500. That is roughly seven times what the calendar is worth.
Where the Real Variable Sits This Fall
The current market adds weight to that comparison. In August 2026, Windermere's Bellevue Commons office reported that 48% of Eastside sales closed only after a price reduction, the highest share in its four regions, and that just 11% sold above asking. King County's Area 33 report shows the mean assessed value of sold properties falling 3.8% between the 2025 and 2026 rolls.
In a market where nearly half of sales need a price adjustment, a few weeks of extra listing time can mean a reduction many times larger than $494. Timing a closing around January 1 trades a known saving of a few hundred dollars for exposure to price movement during the wait. The size of the excise tax bill depends almost entirely on the price, and the price depends on how the home is positioned when it reaches the market.
Under DOR guidance, the seller usually pays the tax. If the seller does not, the buyer becomes responsible, and unpaid tax can become a lien on the property. In most Medina sales, that makes the tax a direct reduction in the seller's net proceeds, which is why the pricing math above matters more than the calendar math.
Questions Sellers Raise About the Reset
Did 2025 or 2026 legislation raise the top rate? No change to the residential brackets was enacted. The Department of Revenue's 2025 legislative summary describes SHB 1791's excise tax change as a narrow exemption for certain community-purpose transfers, effective January 1, 2026, not a rate change. In 2023, The Seattle Times reported on House Bill 1628, which would have raised the top tier to 3.5%. The Legislature's bill history shows it was retained in its House status in January 2024 and placed in the House Rules "X" file.
When do the thresholds move again? The statute sets a four-year cycle, so after January 1, 2027 the next adjustment would take effect January 1, 2031. Once an adjustment takes effect, it cannot be changed.
Is Medina's local rate different from its neighbors? In the May 2026 DOR table, Kirkland and Mercer Island also show 0.50%.
Does the tax apply to transfers that are not traditional sales? The excise tax also applies when 50% or more of the ownership interest in an entity that owns Washington real property is transferred. How that applies to a particular trust or entity is a question for a tax professional.
If you are weighing a Medina sale this fall or next spring, Whittlesey Properties can run the excise tax at your likely price range next to current Eastside pricing conditions, so the decision about timing rests on the numbers. Schedule a consultation and we will work through it with you.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
