Early figures suggest Washington State could bring in $849 million in its first year of collecting the state’s new capital gains tax. This is significantly more than the $248 million that lawmakers expected to collect.
The tax, which was passed in 2021, applies to the sale or exchange of stocks, bonds, and certain other assets above $250,000. It is a 7% tax, and it is paid by the seller of the asset.
The new tax is expected to have a significant impact on small business owners and income property owners. These individuals are often the ones who sell assets that are worth more than $250,000.
Small Business Owners and Capital Gains
The tax could make it more difficult for small businesses to raise capital. When a small business owner sells an asset, the proceeds from the sale are often used to reinvest in the business. The new tax will reduce the amount of money that is available for reinvestment, which could make it more difficult for small businesses to grow.
What’s it mean for real estate?
Here are some things that property owners should know about the new Seattle capital gains tax:
- The tax applies to the sale of any property that is worth more than $250,000.
- The tax is a 7% tax, and it is paid by the seller of the property.
- There are a few exemptions to the tax, such as the sale of a primary residence.
- The tax is expected to go into effect on January 1, 2024.
Property owners should be aware of the new tax as it could have a significant impact on the amount of money they receive from the sale. Most will want to consult with a tax advisor to determine if they are eligible for any exemptions from the tax.
Here are some tips for property owners considering selling their property:
- Get a professional appraisal of your property. This will give you an idea of how much your property is worth.
- Consider selling your property before the tax goes into effect. This will allow you to avoid paying the tax.
This capital gains tax can change your investment strategy as the tax may make it more expensive to sell properties.
Long story short:
In addition to the impact on small business owners and income property owners, the new capital gains tax could also have an impact on the state’s economy. The tax is expected to raise $849 million in its first year. This money could be used to fund programs such as education and infrastructure. However, the tax could also discourage investment, and slow the state’s economic growth.
The impact of the new capital gains tax on small business owners, income property owners, and the state’s economy is still uncertain. However, it is clear that the tax will have a significant impact on these groups.