§12.16 - Foreclosure-Deeds in Lieu of Foreclosure

• Jurisdiction: Washington

§12.16 FORECLOSUREDEEDS IN LIEU OF FORECLOSURE

The real estate excise tax does not apply to any transfer or conveyance made pursuant to an order of sale by the court in any mortgage or lien foreclosure proceeding or upon execution of a judgment. RCW 82.45.010; WAC 458-61A-208. This exemption includes a court-ordered sale of real property by a trustee under the terms of a deed of trust. Real estate excise tax affidavits that claim this tax exemption must cite the cause number of the foreclosure proceeding on the affidavit and the conveyance document. Effective as of May 16, 2014, a taxpayer is no longer required to attach documentation to the affidavit. A copy of the court decision, assignment of indebtedness, and copies of original mortgages, deeds of trust, contracts of sale, and lien documents must be provided to the Department of Revenue upon their request.

Transfers or conveyances of real property made pursuant to an order of sale by a court in any mortgage, deed of trust, or lien foreclosure proceeding is exempt from real estate excise tax. In Determination No. 11-0227, the appointment of a receiver to manage the property and find a buyer did not change the nature of the judicial proceeding. Det. No. 11-0227, 31 Wn. Tax Dec. 57 (2012). The sale was in the context of a judicial foreclosure and court-ordered...