Foreclosure; deeds in lieu of foreclosure

From the 2024 DOR Tax Exemption Study

82.45.010(3)(j) - Foreclosure; deeds in lieu of foreclosure Description Transfers of real property due to a foreclosure are not subject to state or local real estate excise tax. Purpose Transferring real property through foreclosure is not a sale. REET taxes arm's-length purchases of real estate in situations where the purchase price reflects the market price. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $2.080 $2.420 $2.650 $3.160 Local Taxes $0.940 $1.060 $1.200 $1.470 Repeal of Repealing this exemption would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $2.170 $2.650 $3.160 Local Taxes $0.000 $0.960 $1.200 $1.470 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 Forecast Council's March 2023 forecast. - The department electronically receives transaction-level REET data from 36 counties. For the three counties not reporting REET data electronically, this estimate assumes transactions similar to the urban or rural coun