🏛️ Key Legal Changes in Washington State for 2025

1. Estate Tax Reform: New Filing Exemptions

Effective January 1, 2025, House Bill 1867 introduces pivotal changes to Washington's estate tax:​Holmquist + Gardiner

• Estates valued under $2.193 million, where the decedent's interest in a qualifying family residence passes to a surviving spouse, are now exempt from filing an estate tax return.​Beresford Booth+3Holmquist + Gardiner+3jensenestatelaw.com+3

This reform simplifies estate planning for many families, but it's essential to assess how it affects your specific situation. ​

2. Increased Taxes: Capital Gains, Estate, and Business

To address a multibillion-dollar budget shortfall, the state legislature has approved increases in:​Axios+1Axios+1

• Capital Gains Tax

• Estate Tax

• Certain Business Taxes

These hikes aim to fund the state's $78 billion two-year budget. ​Axios+1AP News+1

3. Rent Control Measures Implemented

A new rent stabilization law caps annual rent increases at the lesser of 7% plus inflation or 10%, with a 5% cap specifically for manufactured housing. This legislation affects both landlords and tenants, emphasizing the need for updated lease agreements and compliance strategies. ​AP News

4. Business & Occupation (B&O) Tax Overhaul

Starting October 1, 2025, the B&O tax rate for service-sector businesses with gross revenues over $1 million will increase from 1.75% to 2.1%. This change necessitates a review of business financial strategies and tax planning. ​Spokane Valley Chamber of Commerce

5. Real Estate Regulatory Updates

The state has introduced reforms to address housing supply and affordability:​Axios+11Washington Realtors+11AP News+11

• Building Code Adjustments: Modifications to setback, height limits, and floor area requirements.

• Affordable Housing Incentives: Encouragement for developments that include affordable housing units.​Helsell Fetterman | Seattle Law Firm+6KING 5 News+6Washington Department of Revenue+6

These changes impact developers, investors, and property owners, requiring careful navigation of the new regulations. ​KING 5 News

⚖️ How These Changes Affect You

• Estate Planning: The new estate tax exemptions may influence your estate planning strategies. It's advisable to consult with an attorney to ensure your estate plan aligns with the current laws.

• Business Operations: Increased taxes and regulatory changes necessitate a review of your business structure and financial planning.​

• Real Estate Investments: New rent control measures and building regulations could affect property values and rental income. Landlords and developers should reassess their investment strategies accordingly.​

📞 Stay Compliant with DJN Law Office

Navigating these legal changes can be complex. At DJN Law Office, we specialize in:​

• Estate Planning: Ensuring your assets are protected and your estate plan complies with the latest laws.

• Business Law: Advising on tax implications and regulatory compliance for your business.

• Real Estate Law: Guiding property owners and developers through the new housing regulations.​

Contact us today to schedule a consultation and ensure you're prepared for Washington's evolving legal landscape.