Assignment of property through divorce

From the 2024 DOR Tax Exemption Study

82.45.010(3)(f) - Assignment of property through divorce Description Transfers of real property to a spouse or domestic partner because of divorce, annulment, legal separation, termination of domestic partnership, or property settlement proceedings are not subject to state or local real estate excise tax. Purpose Transferring real property because of divorce, annulment, legal separation, termination of domestic partnership, or property settlement proceeding is not a sale. REET is imposed on arm's-length purchases of real estate in situations where the purchase price reflects the market price. Arm’s-length transactions are generally characterized as voluntary sales in an open market involving parties with equal bargaining power, which is not the case with a court ordered transfer to a spouse or domestic partner. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $71.400 $83.200 $87.300 $104.500 Local Taxes $33.000 $37.500 $40.500 $49.000 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $74.900 $87.300 $104.500 Local Taxes $0.000