Did you know that once the Health Care Law goes into effect in 2013, you will pay a federal tax of 3.8% on the sales price of your home?  Pull out your calculator, but first take some aspirin (or maybe a glass of something much stronger), because on the sale of a $350,000 home, that’s a whopping tax of $13,300 on top of all your other closing costs and the already 1.78%  state and local excise tax, which is a sales tax disguised as an “excise tax.”  Sell a home for $750,000, and you will pay Uncle Sam $28,500 in sales tax.  To all my liberal friends out there, I would ask how liberal are you feeling now?

Paul Guppy wrote this article, which was published in the Spokesman Review in Spokane, Washington on March 28, 2010.  You can read the full text of Paul’s article at Health Care Tax on Real Estate Sales.

UPDATE:  I received a comment from a money manager who is probably one of the best in the country, and he wrote this, “That sales tax effects only a very small % of sales . . . the tax is only on the capital gain of the homes capital gain above $500,000 . . . thus, if you paid $500,000 for the house and sold it for $700,000 . . . the tax is computed only on the $200,000 gain x 3.8%x= $7,600.”  See Health Care Law on Sales of Real Estate.

So the Spokesman-Review “professional journalist” and the editorial staff of this great print newspaper is wrong and the bloggers are right?  That’s a sweet turn on the traditional media, isn’t it?  I say that because of all the criticism so-called professional journalists have been throwing at the rest of us “unprofessionals.”

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Sequim real estate taxes (aka Sequim property taxes) consist of several smaller taxes and bond issues on various projects.  Sometimes the taxes you pay and what you are paying for can be confusing.  Here is an example of what the property tax breakdown is on a $432,000 Sequim home:

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If you are buying real estate in Sequim or even selling, there are some powerful Internet resources online that very few people know about.   Today, I give you more incredible resources absolutely free.

If you have a tax parcel number or the street address, you can look at the database of information of the Clallam County Tax Assessor’s office at:

Clallam County Tax Assessor

If you can’t find the tax parcel number and you don’t know the street address, you can do something hardly anyone knows about.   You can pull up the county parcel map at:

Clallam County Parcel Map (You have to figure out how to use this map, zoom in and make sure the settings you check on the right include individual parcels.   Then you will see the last part of the tax parcel number, and you then have to figure out the full tax parcel number and you can input that into the assessor’s site above.   It’s too bad they make it so hard.)

Would you like to look at recorded real estate documents at the Auditor’s office?   Here’s the page:

Clallam County Auditor’s Recorded Documents

You’ll notice that the links that I gave logical names to are actually lengthy html links that are impossible to remember, so may I suggest you bookmark this article for future reference?   Good idea Chuck.

One last useful link is a look at all real estate for sale in Clallam County:

Sequim and Port Angeles MLS

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Question About Port Angeles and Sequim Property Taxes:   I am unfamiliar about your taxation system, and I think I really should know more before I try buying property and moving into the area.   Especially, I am concerned about having to pay sales tax on a real estate purchase.   Is this the case?   It would be an appalling sales tax if that were true.   Your property tax system looks similar to Montana’s.   However, Montana also collects income taxes; is this true for Washington as well?   One benefit of Montana’s property tax system is its property tax reduction on the basis of low income.   Does Washington have such a reduction?   I wonder if the info is located under your heading “Property Tax Relief Programs”.   Montana’s low income program has been a big help in years when my income was low, as my income tends to bounce around a bit from year to year.

Answer:

To answer your questions, here are a few things about taxes.   I wrote some articles about these things, and here’s some of what I wrote on taxes from a couple of angles.

How much are Clallam County property taxes? How do I calculate my property taxes? How do I get a tax credit? Can I get a senior citizen’s exemption? What about an agriculture or timber exemption? How do I appeal my property tax assessment? All good questions, and for your convenience here are key links that will answer your questions:

Washington State Property Tax History
Washington State Property Valuation Requirements
What is market value?
What types of properties are assessed?
How is real property appraised?
How is personal property valued?
How often does Clallam County appraise property?
Do I have to let the county appraiser into my home or onto my property?
Why may assessed values change from year to year?
Who determines the amount of a property tax bill?
Property Tax Limitations (Statutory Limits)
What is a property tax levy?
Calculating Your Individual Property Tax
Why do property tax rates vary throughout the county?
Public Participation
How do I pay my property taxes?
What if I disagree with my property ´s assessed value?
Property Tax Relief Programs
Property Tax Reform

Free Downloads
Review of Real Property Valuation Determination (20k)
Senior and Disabled Persons Exemption from Real Property Taxes (221k)
Citizens ´ Guide to the Clallam County Budget (154k)
Excise Tax Affidavit
Excise Supplemental Statement
Mobile Home Excise Tax Affidavit

One of the major costs of developing lots are the utility hookup fees the cities charge here.   What are Sequim utility hookup fees for new construction, and how do they compare with Port Angeles?

The city Port Angeles collects the following fees at closing from every purchaser of a new lot, or a lot for the construction of a new home:

1.   $120 for Sanitary Sewer Hookup
2.   $230 for a Water Meter
3.   $1,125 for Sewer System Distribution
4.   $1,265 for Public Works Water System Use Fee
5.   $713 or less for Underground Utilities (Electrical Distribution)

Now let’s look at Sequim.   Sequim fees are substantially more:

1.   $4,500 for General Facility Water
2.   $6,000 for General Facility Sewer
3.   $550 for Water Hookup
4.   $100 for Sewer hookup Inspection
5.   $78.84 for Sewer Backwater valve kit
6.   $329.08 for Full meter package

Add these costs to the cost of purchasing a lot.   And sellers normally pay the excise or sales tax, not buyers.

Best Regards,
Chuck Marunde, J.D.
Broker/Owner/Realtor
Sequim & Port Angeles Real Estate, LLC
618 South Peabody St., Suite I
Port Angeles, WA  98362
(360) 775-5424
(866) 733-7135 fax
chuckmarunde@gmail.com
http://SequimPortAngeles.com

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More government services in Sequim means more taxes. The Sequim City Council has been trying to figure out how to pay for tennis courts at Carrie Blake Park ($300,000), soccer and softball fields on 12 acres just north of the park ($471,500), urban pathways and bikeways, the next phase of the Olympic Discovery Trail ($2,700,000), and a 45-acre wildlife refuge with a parking lot along Highway 101 west of Happy Valley Road ($1,080,000). The dream list of projects comes to $5,726,000.

The answer, according to an expert the council hired from out of town is to tax real estate developers for $4,385,000, which would cover most of these government projects.

Let me think a minute. Right now developers are going bankrupt around the country, lots sit empty, and if you think homes haven’t been selling, you ought to look at the stats for lot sales. Lot sales around Sequim and Port Angeles are virtually non-existent. So, let me see if I can understand the council’s thinking.

1. Tax developers for new projects, who are not likely to start a new development in the next three to five years, especially if the profits they might make (real estate development is a high risk business) are to be taxed away.

2. If and when they do start a project (which may not be for many years given the state of the market), hit them with a tax that they will be forced to pass on to all buyers of the lots in higher purchase prices.   The tax will add about $4,000 to each house or condo, on top of all the other increasing costs.   Don’t forget that taxes are always passed on to the consumer.

I love Sequim, and I’m thankful for our city council members who labor diligently on our behalf, but I must say that the constant tendency of government at all levels is to spend, spend, and spend.   While I love public parks and nature trails more than the average person (I’m a jogger and nature photographer in my recreational time), I can’t afford more taxes. Yes, I may buy a lot some day from a developer, and I prefer to pay less rather than more.   Who can afford higher taxes these days?

The other issue here is whether Sequim wants to encourage retirees to move to Sequim or discourage them. The sequence goes like this. Tax the developers and they pass the tax on the buyers, if they develop land at all.   (Don’t assume developers will develop land in the coming several years. We’ve had tremendous overbuilding, a huge unsold inventory, and lots of upcoming foreclosures and bankruptices.)   Higher prices for lots in Sequim will discourage some retirees from moving here, because many retirees want to have their dream retirement home built on a lot. Already Sequim has the highest utility hookup charges on the Olympic Peninsula as far as I know. Hookup charges for Port Angeles are about $3,000, but for Sequim they are about $10,000. See Sequim hookup charges here.

For those who want to close the gates into Sequim (and there are many), then higher taxes on the development of land makes sense.   The higher the better.   Keep everyone out.   But for those who want to have an economy that stays above water, has jobs for people still working, and thrives, then moving here must be an attractive option.   Remember, Sequim is not the only city in the list of   “Best Places to Retire in the U.S.”

An opinion by Chuck Marunde, J.D., SequimRealEstateNews.com.

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