Step 3 · Your real number, before you list
Cost to Sell a Vacation Rental in Washington: Net-Proceeds and Tax Calculator
Page author
Adriano Tori
Designated Broker, Founder & CEO — RexMont Real Estate · WA Lic. #27660
Adriano leads RexMont Real Estate — the most-reviewed real estate brokerage in Seattle and the Eastside. 1,200+ closed transactions, $1B+ in production, and 1,241 five-star Google reviews.
Written and reviewed by Adriano Tori, Designated Broker, WA Lic. #27660 · last reviewed September 19, 2026 · RexMont Real Estate, 1,241 five-star Google reviews, $1B+ closed across 1,200+ transactions. Not tax, legal or lending advice.
The short answer
Selling costs on a Washington vacation rental are the negotiated commission, the real estate excise tax (a state graduated rate of 1.10% up to $525,000, 1.28% to $1,525,000, 2.75% to $3,025,000 and 3.00% above, plus a county rate of 0.25% to 2.00%), title and escrow, and prep. Furnishings itemized on the excise affidavit are deducted from the taxable price.
The federal tax bill is separate and often larger: depreciation you took is recaptured at up to 25%, the rest of the gain is taxed at 0%, 15% or 20%, and the 3.8% net investment income tax may apply. Washington's capital gains tax exempts real estate. The calculator estimates both layers; your CPA confirms basis and depreciation.
Most owners know roughly what their cabin will sell for. Far fewer know what they will keep, because a short-term rental sale has two cost layers that a primary-residence sale does not. The first is the excise tax, which in Washington is paid by the seller and varies by county: 0.50% local in Chelan or Kittitas, 0.25% in Grays Harbor or Pacific, 2.00% in San Juan County, on top of the state's graduated schedule. The second is the federal tax on the gain, where every dollar of depreciation you (or your cost-segregation study) took comes back at up to 25%, and the rest is capital gain. An owner who bought a Suncadia home for $650,000, depreciated $90,000 and sells for $950,000 has a tax conversation that a net sheet alone does not show.
The calculator below runs both layers. Pick the county, enter the price and the furnishings, then add your CPA's basis and depreciation figures to see an estimate of cash after tax. It is an educational model with starting values, not advice; the seller-side excise is verified by escrow at closing and the federal figures belong to your return.
Estimated cash after tax
$376,908
after $66,640 in selling costs, $56,452 estimated federal tax and payoff
Excise: $9,615 state on $825,000 taxable price plus $4,125 local. Rates per the Washington Department of Revenue.
Educational estimate only, not tax, legal or financial advice. Basis, depreciation and bracket figures come from your CPA; excise is verified at closing by escrow.
Line by line: what comes out at closing
- Commission. Negotiated; the buyer-broker side is negotiated separately since the 2024 industry settlement. RexMont quotes it in writing with the listing agreement.
- Real estate excise tax. Washington's state rate is graduated by price tier under RCW 82.45.060: 1.10% on the portion up to $525,000, 1.28% to $1,525,000, 2.75% to $3,025,000, 3.00% above, with the breakpoints moving to $551,000, $1,551,000 and $3,051,000 for sales closing on or after January 1, 2027. The local rate is added on the full taxable price; the Department of Revenue's local rate table lists each county and the cities that differ.
- Furnishings. Under WAC 458-61A-102 the taxable selling price is the value of the real property; personal property listed on the excise affidavit is deducted. Itemize the furniture, appliances and equipment conveying by bill of sale, at a defensible value, and keep the documentation for four years.
- Title and escrow. Seller-side title insurance and half the escrow fee, typically a few thousand dollars.
- Prep. A deep clean, photography and the repairs a guest ignores and an inspector will not.
- Payoff. Principal, accrued interest to the closing date, and any prepayment penalty; DSCR loans commonly carry one that steps down over three to five years.
- Booking cancellations. If you cancel reservations that fall after closing, Airbnb charges 10% to 50% of the reservation ($50 minimum) and VRBO applies its own host-cancellation consequences. Set a booking cutoff early to keep this line at zero.
The federal layer: recapture, capital gain and the surtax
Your gain is the amount realized (price for the real property, less selling costs) minus adjusted basis (what you paid plus capital improvements, minus depreciation taken or allowable). Depreciation is recaptured first: under §1(h) the unrecaptured section 1250 gain, the part of the gain up to the straight-line depreciation on the building, is taxed at a maximum 25%. Personal-property depreciation from a cost-segregation study (appliances, furniture, land improvements) is recaptured as ordinary income under §1245 to the extent of the depreciation taken, which is why owners who took large first-year deductions should have their CPA run the sale before they price it.
The remainder is long-term capital gain if you owned the property more than a year, taxed at 0%, 15% or 20% depending on taxable income; for 2026 the 15% bracket runs to about $613,700 of taxable income for joint filers and $545,500 for single filers. The 3.8% net investment income tax under §1411 applies above $250,000 (joint) or $200,000 (single) of modified adjusted gross income to gains from a passive rental; a short-term rental that was a non-passive trade or business through material participation may fall outside it, a question for your CPA.
Washington's capital gains excise tax (7%, plus 2.9% above $1,000,000 of gains starting 2025) expressly excludes real estate transferred by deed under RCW 82.87.050. There is no state income tax. The state's cut of your sale is the excise tax above, nothing more.
Two ways to shrink the federal bill
A 1031 exchange defers all of it into a replacement property, subject to the vacation-home safe harbor and the 45- and 180-day clocks on the 1031 page. Converting the cabin to your primary residence for two years can exclude up to $250,000 or $500,000 of gain under §121, but gain allocated to the years it was a rental after 2008 and all post-1997 depreciation stay taxable; the capital gains page walks through it.
Worked example
| Line | Amount | Note |
|---|---|---|
| Sale price including $25,000 furnishings | $850,000 | |
| Taxable selling price (real property) | $825,000 | Furnishings itemized on the affidavit |
| State excise | −$9,615 | 1.10% on $525,000 + 1.28% on $300,000 |
| Chelan County local excise (0.50%) | −$4,125 | |
| Commission (5%) | −$42,500 | Negotiated |
| Title, escrow, prep | −$10,400 | |
| Mortgage payoff | −$350,000 | |
| Net proceeds at closing | ≈ $433,360 | |
| Taxable gain: $825,000 − costs − ($550,000 basis − $60,000 depreciation) | ≈ $268,360 | Furnishings treated as sold at cost |
| Recapture: $60,000 × 25% | −$15,000 | |
| Capital gain: $208,360 × 15% | −$31,254 | |
| Net investment income tax: 3.8% × gain | −$10,198 | If applicable |
| Estimated cash after federal tax | ≈ $376,900 | Washington: $0 on real estate |
Rounded. The calculator above reproduces this example with the default inputs; change the county to see the local excise move (Grays Harbor 0.25%, San Juan 2.00%).
Checklist
Net-sheet checklist
- Confirm the county (and city) local excise rate for the parcel from the DOR table.
- Itemize furnishings and equipment conveying, with values, for the excise affidavit and the bill of sale.
- Get the payoff letter with per-diem interest and any prepayment penalty.
- Get adjusted basis and total depreciation from your CPA's schedule, including cost-segregation and bonus depreciation.
- Decide whether a 1031 exchange or a residence conversion changes the answer before you list.
- Pick the closing date with the January 1, 2027 excise breakpoints in mind.
FAQ
Questions Washington STR sellers ask first.
How much does it cost to sell a vacation rental in Washington?
Commission (negotiated), the state real estate excise tax (1.10% to 3.00% by price tier) plus the county's local rate (0.25% to 2.00%), title and escrow, prep, and any booking-cancellation fees. Furnishings itemized on the excise affidavit are deducted from the taxable price. On top of closing costs, federal tax on the gain includes depreciation recapture at up to 25%.
Who pays the real estate excise tax in Washington?
The seller, at closing, through escrow. The state rate is graduated by price tier and the county or city adds a local rate on the full taxable selling price.
Are furnishings taxed when I sell a furnished Airbnb?
Not by the real estate excise tax, if they are itemized as personal property on the excise affidavit; WAC 458-61A-102 limits the taxable selling price to the real property. Convey them by a separate bill of sale and keep the valuation documentation.
What is depreciation recapture on a vacation rental sale?
The part of your gain equal to the depreciation you took (or could have taken) on the building is taxed at a maximum 25% rather than the lower capital gains rate. Depreciation on personal property from a cost-segregation study is recaptured as ordinary income. A 1031 exchange defers both.
Does Washington have a capital gains tax on selling a rental property?
No. Washington's capital gains excise tax applies to certain stocks and other assets, not to real estate transferred by deed, which RCW 82.87.050 exempts. The state's charge on a property sale is the real estate excise tax.
Sources we checked
- WA DOR real estate excise tax
- RCW 82.45.060 graduated REET rates and 2027 adjustment
- WA DOR local REET rates (May 2026)
- WAC 458-61A-102 selling price
- 26 U.S.C. §1(h) capital gains rates and unrecaptured §1250 gain
- IRS Rev. Proc. 2025-32 (2026 brackets)
- 26 U.S.C. §1411 net investment income tax
- RCW 82.87.050 capital gains tax exemptions
- Airbnb host cancellation policy
Related on rexmont.com
Exact net sheet
Want the line-by-line version against your actual property?
Send the address, your payoff and what you know about basis and depreciation. A RexMont broker prepares an exact net sheet with the county excise rate and coordinates the tax estimate with your CPA.
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