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Andre C.
  • Real Estate Investor
  • Everett, WA
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Avoid a Washington State excise tax in cash-out refinance?

Andre C.
  • Real Estate Investor
  • Everett, WA
Posted

**Forgive me if some of the terminology is incorrect below, I will certainly consult an attorney and CPA, but figured to ask BP ahead of time.**

I have a duplex in Washington state which I currently am in the process of doing a cash-out refinance for future investments (to apply the BRRRR strategy). The property is owned F&C by a business partner and myself with our LLC on title. Because of recent job changes by my business partner, we agreed to do the refinance solely under my name.

I'm finding out from different title companies whom the lender has assigned, that an excise tax is due when refinancing because the title is changing (from LLC to single owner or multi-owned to single owner?)

Question 1 - Is there any way to avoid the excise tax? I see that there may be exemptions according to Washington state law.

I do want to quit claim this soon after the refinance back to the LLC for liability protection.

Question 2 - What would that excise tax be?

Question 3 - If we decided to just refinance together (quit claim to both of us) would we still be assessed an excise tax?

Question 4 - Is there an excise tax again when quit claiming it back again to under the LLC?