Washington’s 2025 Tax Changes: What Residents Should Know — Perkins & Associates 0 items $0 # Washington’s 2025 Budget Changes Explained for Local Residents October 27, 2025 Taxes aren’t exactly a fun dinner topic, but this year, every Washington resident has a reason to pay attention. We want to help you stay ahead of the game and be ready to have the conversations with your tax professionals. The **2025 state budget** brings a series of tax adjustments that will affect families, small business owners, and even estate planning for homeowners. Here’s the truth: these aren’t just numbers on paper, they influence **how you plan your future, your savings,** **and even your next move in the housing market.** In this guide, I’ll break down what’s changing, how it could impact you, and what steps Washington residents can take to stay ahead. ## **What’s Changing in Washington’s 2025 Budget?** Washington’s 2025–2027 operating budget introduces **three new revenue bills** that aim to increase state funding for infrastructure, education, and social programs. But to raise that revenue, **taxes are going up** in key areas — especially for **service-based businesses, estates, and individuals earning capital gains.** Here’s a simple breakdown: - The **sales tax** now extends to several professional services that weren’t taxed before (like advertising, tech consulting, and staffing). - The **capital gains tax** increases from **7% to 9.9%** on profits over $1 million. - The **estate tax** threshold rises to $3 million, but higher-value estates will face new upper tax brackets. - **Business and Occupation (B&O) taxes** are also increasing slightly for service businesses earning more than $5 million annually. So, while the budget expands state funding, it also means a **ripple effect** on costs across the state. ## **Which Taxes Are Increasing and Who’s Most Affected?** Not everyone will feel these changes the same way. The adjustments target higher-income earners, large estates, and businesses with significant gross receipts. However, **ordinary residents may still feel indirect effects** through higher costs for goods and services. Here’s who’s most impacted: - **High-income individuals and investors:** Anyone realizing large capital gains (over $1 million) will pay the new 9.9% rate. - **Large estates:** Estates over $9 million will face up to a 35% top marginal rate. - **Service businesses:** Web developers, consultants, and advertising firms will now charge sales tax on previously exempt services. For most households, that might mean small **price increases** for professional services — from home renovation consulting to marketing costs for small businesses. ## **How Do These Changes Impact Homeowners and Local Families?** For Washington homeowners, the 2025 tax updates may influence **estate planning, inheritance, and overall cost of living.** - **Estate planning:** The increased $3 million exemption offers some relief for smaller estates, but wealthier families may need to revisit trusts or gifting strategies. - **Property and services:** While property tax rates aren’t directly changing, rising costs for contractors and home improvement services could affect project budgets. - **Home affordability:** If service providers pass on the new sales tax to consumers, costs tied to buying or selling — like staging, marketing, or home prep — could increase slightly. The good news? Washington’s housing market remains strong. While costs may shift, **long-term homeownership continues to be one of the best protections against inflation and rising expenses.** ## **What Should Small Business Owners and Freelancers Know?** If you’re self-employed or run a service-based business in Washington, you’ll want to pay special attention. Starting October 2025, the state will collect sales tax on seven service categories, including **custom web development, advertising, IT services, and temporary staffing.** **What this means for you:** - You’ll need to register to collect and remit sales tax if you fall under these new service categories. - Businesses earning over $100,000 in gross receipts within Washington may be subject to both **sales tax** and **B&O tax** obligations. - If you operate remotely or across state lines, double-check where your “nexus” applies — many online businesses will now need to comply with Washington’s rules. This may sound intimidating, but local accountants and tax advisors can help business owners navigate these transitions smoothly. ## **Does the New Capital Gains Tax Affect Real Estate Sales?** Here’s an important clarification: **Washington’s capital gains tax does not apply to the sale of real estate.** That’s right, if you sell your primary residence or an investment property, those proceeds are exempt from the capital gains tax. However, it’s wise to remember: - **Investment portfolios, stock options, and business sales** could trigger the tax. - Property held within certain trusts or corporations might be treated differently, depending on ownership structure. If you’re selling real estate in 2025, this change **shouldn’t directly affect you** — but it’s a reminder that your overall financial picture (investments, inheritance, etc.) is interconnected. ## **How Could These Updates Influence Washington’s Housing Market?** In the short term, housing demand across **South King County** and nearby regions like Maple Valley and Bonney Lake is expected to stay **steady**. Why? Because while taxes are increasing for businesses and high earners, the **housing shortage and population growth** in these areas continue to drive demand. However, we might see: - **More strategic timing of sales** among higher-income sellers with estate planning in mind. - **Slightly slower investment activity** in high-value properties. - **Ongoing demand from buyers relocating from Seattle** seeking more space, better schools, and smaller tax footprints. As always, housing is about more than economics, it’s about **lifestyle, security, and long-term value.** ## **What Steps Can Residents Take to Prepare?** Whether you’re a homeowner, small business owner, or planning your estate, a few proactive steps can help you stay ahead of the 2025 changes: 1. **Review your financial plan.** Meet with a tax or estate advisor to understand how these updates affect you personally. 2. **Reassess your home’s value.** If you’re planning to sell or refinance, knowing your current equity helps guide decisions. 3. **Plan upgrades wisely.** Factor in new service taxes if hiring contractors or professional services. 4. **Stay informed.** Policy changes evolve — keeping in touch with a local expert ensures you adapt quickly. ## **Conclusion** Change is inevitable, but with the right information and planning, it doesn’t have to be overwhelming. Washington’s 2025 budget may bring new tax responsibilities, but it also offers opportunities to reassess, plan smartly, and build long-term stability through real estate and sound financial decisions. If you’re wondering how these updates could affect your home, estate, or next move, I’m here to help you make sense of it all, locally and personally. **Ready to plan your next move in South King County? **📞 Contact us at **(206)-960-4985** or email **[email protected]** to start your personalized home strategy today. **Honest. Effective. Reliable.** ## **Frequently Asked Questions** **Q: What is the new capital gains tax rate in Washington for 2025? **A: Starting January 1, 2025, long-term capital gains exceeding $1 million are taxed at **9.9%**, up from 7%. **Q: Do these changes mean higher property taxes too? **A: No direct property tax increases are part of the 2025 budget, though local levies may still adjust depending on district budgets. **Q: Will selling my home trigger capital gains taxes? **A: In most cases, **no** — real estate sales remain exempt from Washington’s capital gains tax. Always confirm with your tax advisor. **Q: How can families plan ahead under these new laws? **A: Consider reviewing your estate plan, trust structures, and financial strategy to ensure your assets are protected under new thresholds. ### **Sources** 1. https://dor.wa.gov 2. https://www.seattletimes.com/business/washington-state-budget-2025 3. https://www.nar.realtor/research-and-statistics 4. https://www.bizjournals.com/seattle #### Suggested Blogs [  **From Date Nights to Mortgage Payments: Tips for Couples Buying Their First Home Together**](https://perkinsnwre.com/blog/2026/2/10/from-date-nights-to-mortgage-payments-tips-for-couples-buying-their-first-home-together)[  **7 Simple But Effective Habits For A Cleaner and Tidier Home All Year**](https://perkinsnwre.com/blog/2026/1/20/simple-but-effective-habits-for-a-cleaner-and-tidier-home-all-year)[  **Preparing Your Home for Sale in 2026: What Actually Matters and What Doesn’t**](https://perkinsnwre.com/blog/2026/1/12/preparing-your-home-for-sale-in-2026-what-actually-matters-and-what-doesnt)[  **Maple Valley Housing Trends for 2026: Prices, Demand, and What Buyers Should Expect**](https://perkinsnwre.com/blog/2026/1/9/maple-valley-housing-trends-for-2026-prices-demand-and-what-buyers-should-expect)[  **Conforming Loan Limits for 2026: What Homebuyers Need to Know Before They Buy**](https://perkinsnwre.com/blog/2026/1/7/conforming-loan-limits-for-2026-what-homebuyers-need-to-know-before-they-buy) Edit Lead Form OPEN PAGE Optional custom content for this leadform (unique to this page) Name First Name(required) Last Name(required) Email(required) Phone(required) By providing your cellular telephone, you are consenting to allow Perkins & Associates to contact you with informational communications via voice call, AI voice call, text message, or similar automated means. To opt out, you can reply 'stop' at any time or reply 'help' for assistance. Message and data rates may apply. Message frequency may vary. For more information, see our PRIVACY POLICY For more information see our [Privacy Policy](https://perkinsnwre.com/blog/2025/10/27/washingtons-2025-budget-changes-explained-for-local-residents#) SubmitSubmit  We are committed to respecting your right to privacy and protecting your information when you use our services. This privacy policy also describes the choices available to you regarding our use of your personal information and how you can access, update and delete this information. We want you to understand what information we gather about you, how we use it and the safeguards we have in place to protect it. This Privacy Policy applies to information collected through this website and otherwise. Your use of this website and our services, and any disputes arising from it, is subject to this Privacy Policy as well as the Terms of Use and all its dispute resolution provisions, including arbitration, limitation on damages and choice of law. This website is a general audience site and we do not knowingly collect personal information from children under the age of 13. If you have questions or concerns regarding this policy, you should first contact{' '} [[email protected]](mailto:[email protected]) 1. Collection and Use of Your Personal Information We collect Personal Information from you only when you voluntarily submit it in order to obtain certain information, including without limitation (A) requests to find out more about our programs; (B) requests to contact us; and (C) requests to forward your information to one of our affiliates. We do not honor all “do not track” requests and settings. If you use any signal(s) or another mechanism(s) that provides you the ability to exercise choice regarding the collection of personally identifiable information about your online activities over time and across third-party websites or online services, we will attempt to override such signals or mechanisms. When you use our website, no other parties can collect personally identifiable information about your online activities over time and across different websites. Your choice is indicated by your settings in your web browser. A “do not track” indication sent from your web browser will not result in any tracking activity (i.e., tracking cookies) within the website to be programmatically disabled. We collect the following personal information from you: - Contact Information such as name, email address, mailing address, and phone number We use this information to: - Send you requested product or service information
- Respond to customer service requests
- Administer your account
- Send you a newsletter
- Send you marketing communications
- Improve our Web site and marketing efforts
- Conduct research and analysis
- Display content based upon your interests Data will not be sold or shared with third parties for promotional or marketing purposes. Information collected may be used to help train AI models and approve our offerings. By clicking the Submit button, you agree to have your information shared with us and for us to initiate contact with you at the telephone number you provided using live, recorded, artificial, or AI-generated voice, mobile phone (including through automated dialing, text SMS/MMS, or pre-recorded messaging) and/or email, even if your telephone number is on a corporate, state, or the National Do Not Call Registry, and you agree to our Privacy Policy. You further represent that you have the authority to provide this consent regarding voice and text calls to the telephone number you provided. To opt out of voice calls, tell the operator you no longer wish to receive voice calls. To opt out of text calls, reply “Stop”. For text messaging, you agree to only use the term “Stop” to communicate an opt out. The rights of Users We adopt this Notice to comply with the California Consumer Privacy Act of 2018 (CCPA). Any terms defined in the CCPA have the same meaning when used in this Notice. Users may exercise certain rights regarding their Data processed by the Owner. In particular, Users have the right to do the following: - **Withdraw their consent at any time.** Users have the right to withdraw consent where they have previously given their consent to the processing of their Personal Data.
- **Object to processing of their Data.** Users have the right to object to the processing of their Data if the processing is carried out on a legal basis other than consent. Further details are provided in the dedicated section below.
- **Access their Data.** Users have the right to learn if Data is being processed by the Owner, obtain disclosure regarding certain aspects of the processing and obtain a copy of the Data undergoing processing.
- **Verify and seek rectification.** Users have the right to verify the accuracy of their Data and ask for it to be updated or corrected.
- **Restrict the processing of their Data.** Restrict the processing of their Data. Users have the right, under certain circumstances, to restrict the processing of their Data. In this case, the Owner will not process their Data for any purpose other than storing it.
- **Have their Personal Data deleted or otherwise removed.** Users have the right to obtain the erasure of their Data from the Owner by placing a request at the below designated support email address [[email protected]](mailto:[email protected]){' '} including their Facebook URL, first and last name, email address and/or phone number for identification purposes, or user can also request removal of data from Ylopo by removing the "Local Home Search" app connected to the Facebook account that was used for login. Go to Facebook settings, navigate to "Apps and Websites," and find the app named "Local Home Search". Click "Remove" next to the app's name.
- **Receive their Data and have it transferred to another controller.** Users have the right to receive their Data in a structured, commonly used and machine readable format and, if technically feasible, to have it transmitted to another controller without any hindrance. This provision is applicable provided that the Data is processed by automated means and that the processing is based on the User's consent, on a contract which the User is part of or on pre-contractual obligations thereof.
- **Lodge a complaint.** Users have the right to bring a claim before their competent data protection authority. Details about the right to object to processing Where Personal Data is processed for a public interest, in the exercise of an official authority vested in the Owner or for the purposes of the legitimate interests pursued by the Owner, Users may object to such processing by providing a ground related to their particular situation to justify the objection. Users must know that, however, should their Personal Data be processed for direct marketing purposes, they can object to that processing at any time without providing any justification. To learn whether the Owner is processing Personal Data for direct marketing purposes, Users may refer to the relevant sections of this document. How to exercise these rights Any requests to exercise User rights can be directed to the Owner through the contact details provided in this document. These requests can be exercised free of charge and will be addressed by the Owner as early as possible and always within one month. We may provide this information in a standardized format that is not specific to you. The designated email address for these requests is{' '} [[email protected]](mailto:[email protected]) Consent to Receiving Emails, Auto-Dialing & Auto-Texting: By registering, you are giving us and our professional real estate clients and advertisers permission to contact you via text message, email, or telephone using the email address and/ or telephone number that you have provided during the registration process. Such contact may, from time to time, include attempts to contact you via auto-dialing, prerecorded or artificial voice, or auto-texting technology. You may opt out of receiving these forms of communication by unsubscribing from any email communication or texting STOP as a reply to one of our text communications. There is no fee charged by us or its advertisers to receive text messages, however, your mobile service provider may charge you for sending and/or receiving text messages and air-time, as well as any other standard applicable rates charged by your mobile service provider. Information Sharing We may share your personal information with any other business associated with this site, in the ways that are described in this Privacy Statement. We may provide your personal information to our subcontractors in support of our services, such as customer service. These companies are authorized to use your personal information as is necessary to provide these services to you. We may also disclose your personal information: - As required by law such as to comply with a subpoena, or similar legal process.
- When we believe in good faith that disclosure is necessary to protect our rights, protect your safety or the safety of others, investigate fraud or respond to a government request,
- To any other third party with your prior consent to do so. Cookies and Other Tracking Technologies We may use cookies, for example, to keep track of your preferences and profile information. Cookies are also used to collect general usage and volume statistical information that does not include personal information. We may use another company to place cookies on your computer to collect non-personally identifiable information to compile aggregated statistics for us about visitors to our site. Links to Other Web Sites Our Site includes links to other Websites whose privacy practices may differ from ours. If you submit personal information to any of those sites, your information is governed by their privacy policy statements. We encourage you to carefully read the privacy statement of any Web site you visit. Security The security of your personal information is important to us. We follow generally accepted industry standards to protect the personal information submitted to us, both during transmission and once we receive it. No method of transmission over the internet, or method of electronic storage is 100% secure, however. Therefore, we cannot guarantee its absolute security. If you have any questions about the security of our Web site, you can contact our website and advertising provider [[email protected]](mailto:[email protected]) Special Notice to California Residents. If you are a resident of California, in addition to the rights set forth in this Privacy Policy: 1. We will not share any personal information about you to the extent prohibited by applicable California law or to the extent your prior consent to share is required by applicable California law; and 2. You have the right to request information from us regarding the manner in which we share certain categories of information with third parties for their direct marketing purposes. California law gives you the right to send us a request at a designated address to receive the following information - the categories of information we disclosed to third parties for their direct marketing purposes during the preceding calendar year
- the names and addresses of the third parties that received that information; and
- if the nature of the third party's business cannot be determined from their name, examples of the products or services marketed. Additional Policy Information Our Web site includes Widgets, which are interactive mini-programs that run on our site to provide specific services from another company (e.g. displaying the news, opinions, music, etc.). Personal information, such as your email address, may be collected through the Widget. Cookies may also be set by the Widget to enable it to function properly. Information collected by this Widget is governed by the privacy policy of the company that created it. Our Web site offers publicly accessible blogs, social media, or community forums such as Facebook, Twitter, or Google Plus. You should be aware that any information you provide in these areas may be read, collected, and used by others who access them. Visiting our Websites From Outside the United States. This Privacy Policy is intended to cover collection of information on our websites from residents of the United States. If you are visiting our websites from outside the United States, please be aware that your information may be transferred to, stored and processed in the United States where our servers are located and our central database is operated. The data protection and other laws of the United States and other countries might not be as comprehensive as those in your country. By using our services, you understand that your information may be transferred to our facilities and those third parties with whom we share it as described in this Privacy Policy. No Rights of Third Parties. This Privacy Policy does not create rights enforceable by third parties or require disclosure of any personal information relating to users of our websites. Notification of Privacy Policy Statement Changes We may update this privacy statement to reflect changes to our information practices or changes in regulations governing privacy. If we make any material changes we will notify you by email (sent to the email address specified in your account) or by means of a notice on this Site prior to the change becoming effective. We encourage you to periodically review this page for the latest information on our privacy practices. Terms and Conditions 1. We use SMS to confirm appointments, send reminders, and notify clients of schedule updates or important changes. 2. You can cancel the SMS service at any time. Just text "STOP". After you send the SMS message "STOP" to us, we will send you an SMS message to confirm that you have been unsubscribed. After this, you will no longer receive SMS messages from us. If you want to join again, just sign up as you did the first time, and we will start sending SMS messages to you again. 3. If you are experiencing issues with the messaging program you can reply with the keyword "HELP" for more assistance, or you can get help directly at{' '} [[email protected]](mailto:[email protected]). 4. Carriers are not liable for delayed or undelivered messages. 5. As always, message and data rates may apply for any messages sent to you from us and to us from you. Message frequency may vary. If you have any questions about your text plan or data plan, it is best to contact your wireless provider. 6. Your opt-in data will not be shared with 3rd parties. This Privacy Policy was last revised on February 25, 2026. We reserve the right to modify or amend this policy at any time by posting the revised Privacy Policy on the website. true Loading ADA Widget... reCAPTCHA Recaptcha requires verification. [Privacy](https://www.google.com/intl/en/policies/privacy/) - [Terms](https://www.google.com/intl/en/policies/terms/) protected by **reCAPTCHA** [Privacy](https://www.google.com/intl/en/policies/privacy/) - [Terms](https://www.google.com/intl/en/policies/terms/) BESbswy BESbswy
