Condemnation proceedings

From the 2024 DOR Tax Exemption Study

82.45.010(3)(h) - Condemnation proceedings Description Transfers of real property to a governmental body because of a forced sale are not subject to state or local real estate excise tax. Purpose Transferring real property through "eminent domain" or condemnation proceedings 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-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 forced sale to a governmental body. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $10.100 $11.800 $12.900 $15.100 Local Taxes $2.500 $2.800 $3.200 $3.800 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $10.600 $12.900 $15.100 Local Taxes $0.000 $2.500 $3.200 $3.800 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2025. - Growth rate mirrors the REET growth rate reflected in the Economic and Revenue