The Washington millionaire tax: what it covers and what it exempts
Washington enacted a 9.9% individual income tax above $1 million beginning in 2028. I-645 would repeal it. This page separates that law from the capital-gains and estate taxes that already apply.
9.9%
Income-tax rate above the $1M deduction, beginning in 2028
Nov. 3
2026 election date for the certified I-645 repeal measure
$3M
Estate-tax exclusion for deaths on or after July 1, 2026
The enacted law and the repeal vote
Senate Bill 6346 enacted an individual income tax of 9.9% above $1 million, effective January 1, 2028. It remains law unless voters repeal it or a court strikes it down. Initiative 645 is currently Certified for the November 3, 2026 general-election ballot. I-645 would repeal the new income tax and prohibit state and local individual income taxes.
That is different from saying Washington has no enacted income tax. Washington does not collect this new tax today, but the law is enacted and scheduled to take effect in 2028.
The three taxes, side by side
The new individual income tax starts with federal adjusted gross income, applies statutory modifications, and then uses a $1 million standard deduction. It begins in 2028.
The separate capital-gains excise tax applies to taxable long-term gains. Its current top tier is 9.9%, and real estate is exempt. The 2026 standard deduction is currently recorded as: Not yet published; the Department of Revenue lists $278,000 for 2025.
The separate estate tax has an exclusion of $3 million for deaths on or after July 1, 2026, with rates that can reach 35%.
What this means for a property decision
A home sale is not automatically subject to either 9.9% figure. Real estate remains exempt from Washington's capital-gains excise tax. Federal capital-gains rules and Washington real-estate excise tax can still apply. The new income tax has its own base, deductions, exclusions, and future guidance, so a CPA should model it rather than treating the sale price as taxable income.
For an Eastside household, the practical work is to separate four questions: current income, realized investment gains, gross-estate value, and the economics of the property move. The Eastside homeowner guide to I-645 and Washington's Millionaire's Tax connects those rules to Bellevue, Kirkland, and Medina real estate.
This is not tax or legal advice. Aditya Kasturi is a licensed real estate broker, not a CPA, attorney, or financial advisor. Figures are illustrative, based on Washington and federal law as understood at the time of writing, and laws change. Confirm any strategy on this page with your CPA and, where relevant, your estate planning attorney before acting.
The four guides
Washington capital gains tax
Rates, the $1M surcharge, the real estate exemption, and a worked example on a $1.5M stock gain.
Washington estate tax
The $3M exclusion, the 35% top rate, and why the house is usually the largest item in the estate.
The RSU playbook
For Microsoft, Amazon, Google, and Meta employees: vest, sell, and buy in the right order.
The exit and liquidity guide
For founders: the 18 months before a term sheet, and the property moves that belong in them.
Services built around the new rules
Equity-to-real-estate rotation
Move concentrated stock into the asset class Washington does not tax.
Pre-exit planning
The real estate decisions that belong before your term sheet.
1031 exchange advisory
Reposition investment property without a current tax bill.
Tax-aware home sale
A sale plan that starts from your tax year, not the listing calendar.
Estate and trust sales
Fiduciary-grade execution for personal representatives and trustees.
Waterfront and luxury acquisition
Waterfront search planning and diligence on Lake Washington.
Leaving Washington
Selling, retaining, and establishing residency properly.
Moving to Washington
For W2 income, Washington remains the best tax deal in tech.
Common questions
Clear answers first. If one question changes the deal, bring it into the review before you move money.
Q1Is there a Washington wealth tax on assets I hold?+
The 2026 law is an individual income tax, not an annual tax on net worth. It applies beginning in 2028 after a $1 million standard deduction unless it is repealed or invalidated. Washington's capital-gains excise tax and estate tax are separate laws.
Q2Does the 9.9% apply to my home sale?+
No. Real estate sales are exempt from the excise tax at any price.
Q3Do RSUs get taxed by Washington when they vest?+
Under the enacted 2028 income-tax law, vesting income may enter the Washington income-tax calculation when household income exceeds the statutory deduction. The separate capital-gains tax can apply to later appreciation when shares are sold. Confirm the treatment with a CPA.
Get your exposure mapped against the current thresholds.
Book a Tax-Impact Property ReviewNext steps
Keep moving forward
Washington's Millionaire's Tax and I-645: What Eastside Homeowners Should Know
A Kirkland broker explains the Washington Millionaire's Tax, I-645, and what wealth migration means for Bellevue, Medina, and Kirkland homeowners.
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