Is Vancouver, WA Really Cheaper Than Portland, OR on Taxes? | Disclosures with Nick & Dave

Episode summary

"Why would anyone live in Oregon? Washington wins on taxes." It's the line every Pacific Northwest agent repeats — so we put it to the test, Multnomah County (OR) versus Clark County (WA), line by line.

The short answer: long term, Washington usually wins — but it's closer than the bumper sticker suggests, and there are real cases where Oregon comes out ahead. Dave and I walk through the whole stack: Oregon's tiered income tax (and Washington's lack of one) against Washington's eye-watering excise tax at sale; property taxes that barely differ; Portland's pile of local taxes (SHS, Preschool-for-All); the sales-tax trade-off; and estate tax for the long, long haul. We get into the "live in Washington, work in Oregon" arbitrage (spoiler: it depends on whether you're truly remote), why a house flipper is better off in Portland, and the break-even horizon — roughly 9–15 years — where Washington's savings finally overtake that excise-tax hit.

The real throughline is the one we keep landing on: over a ten-year scope you're often splitting hairs, so don't let a tax spreadsheet pick your home. Loving where you live beats optimizing the last hundred bucks. And none of this is tax advice — we're realtors with microphones, not CPAs, so the big decisions belong with a professional.

Hosted by Nick Aufenkamp and Dave Miller of The Tartan Team, brokered by Real Broker, LLC. Serving Clark County and Southwest Washington.

Run your own numbers: try our rent-vs-own calculator — it compares Clark County, WA and Portland, OR and factors the WA excise tax into the exit.

Corrections & Sources

This transcript preserves what was said on-air. A few tax figures were approximate or have since changed — here's the record set straight, with sources. None of this is tax advice; consult a CPA for your situation.

Washington's top estate-tax rate is now 20%, not 35%. On-air, Nick says WA's top estate-tax rate "currently goes up to 35%" and that lawmakers are "trying to move it back to 20%." That rollback has already taken effect: as of July 1, 2026, the top rate reverted to 20% (on estates over $9M), with a $3 million exclusion ($3.076M for deaths in the first half of 2026). Sources: WA DOR — Estate tax tables, Mercer Advisors.
Washington's new high-earner income tax isn't in effect yet. Nick references a "new law passed this year" adding income tax above ~$1M. That's ESSB 6346, signed March 30, 2026 — a 9.9% tax on income over $1M — but it doesn't take effect until January 1, 2028, and it is likely headed to a November 2026 ballot referendum. As of this recording, Washington has no personal income tax in effect. Sources: The Startup Law Blog — WA income tax guide, WA Legislature — ESSB 6346 bill report.
The WA excise-tax (REET) brackets, precisely. The graduated state rates are 1.10% up to $525,000, 1.28% from $525,000 to $1,525,000, 2.75% from $1,525,000 to $3,025,000, and 3.0% above $3,025,000 — so the tier breaks are $1.525M and $3.025M (not exactly $1.5M/$3M), and the 1.28% band tops out at $1.525M (not $5M). Local REET — about 0.50% in Vancouver — is added on top, which is why the on-air examples ($8,000 on a $500K sale; $16,855 on a $1M sale in Vancouver) check out. Source: WA DOR — Real estate excise tax.
Washington does have a capital-gains tax — but home sales are exempt. Nick says there's "no capital gains tax" at the state level. More precisely, WA levies a 7% excise tax on certain long-term capital gains (e.g., stocks) above an annual threshold (~$270K) — but real estate sales are specifically exempt, so his point holds for home sellers. Source: WA DOR — Capital gains tax.
Portland's PFA and SHS are local income taxes, and they hit high earners — not median households. Preschool-for-All (Multnomah County) and Supportive Housing Services (Metro) are personal income taxes, not property taxes. PFA's scheduled 0.8% increase (1.5% → 2.3%) was delayed to January 1, 2027, as stated. But these — plus Oregon's 9.9% top income rate — only apply at the margin to higher incomes (PFA and SHS start at $125K single / $200K joint; Oregon's 9.9% starts at $125K single / $250K joint). A genuinely median-income household would not owe the stacked ~11% figure cited on-air. Sources: Multnomah County — Preschool for All, Metro — Supportive Housing Services tax.
Verified as stated: Oregon's income tax (8.75% / 9.9% top rate), Oregon's estate tax ($1M exemption, 10–16%), the Washington County, OR deed tax (~$1 per $1,000 — the only Oregon county with one), and the federal home-sale capital-gains exclusion ($250K single / $500K married) are all accurate as described. Sources: Oregon DOR — Personal income tax, Oregon estate tax overview.

In this episode

[00:59] The setup: Multnomah County (OR) vs. Clark County (WA)
[02:57] The short answer — and the cases where Oregon actually wins
[03:47] Income tax: none in WA (for now) vs. Oregon's tiered 8.75–9.9%
[05:11] The excise-tax shock — WA's transfer tax vs. Oregon's zero
[06:18] The one Oregon county that does have a deed tax
[08:27] How tiered brackets actually work (you're not taxed all at once)
[10:00] Property tax: ~0.9% Clark vs. ~1.02% Multnomah
[14:00] Portland's local taxes: SHS and Preschool-for-All
[15:53] "Portland's weirdly high taxes" — and who's leaving
[19:19] Can you live in WA and dodge Oregon income tax? (It depends)
[24:56] Oregon's real edge: no sales tax
[27:38] The break-even: ~9–15 years, driven by the excise tax
[32:08] Estate tax: Washington's $3M vs. Oregon's $1M
[36:42] The house-flipper problem: why the excise tax kills short holds
[40:26] Bottom line — and why loving where you live wins

Links from this episode

Episode 5 — Renting Is Cheaper Right Now: Here's When Buying Still Wins — the previous episode
Rent-vs-own calculator — the tool Dave references, comparing Clark County, WA and Portland, OR
Clark County Property Taxes, Explained — 2026 rates by city
Book a free consultation

Transcript

Lightly edited for readability. Speaker attribution in the fast cold-open banter is approximate; attribution through the substantive tax discussion is reliable. On-air tax figures are preserved as spoken — see Corrections & Sources above.

Nick (00:00): Hey everybody, and welcome back to Disclosures with Nick and Dave. As always, I am your host, Nick Aufenkamp, along with my wonderful co-host, Dave Miller. Dave, what's going on?

Dave: Not a whole lot. We're about to talk about everybody's favorite topic. I'm strapped in.

Nick: What's that?

Dave: You're unaware? It's taxes.

Nick: I don't know — everybody's... my gosh. Yeah, okay. So we're talking taxes, everyone's favorite topic.

Dave: I think so.

Nick: Yeah. You hang out with a lot of nerds, man.

Dave: I mean, guilty as charged. Yeah. Honestly, that's like ninety percent though of why I so desperately needed you to join the Tartan team — is because I am, doctor-prescribed, allergic to taxes. Fiscally in the red.

Nick: Is it a "if you just don't think about it, it goes away" sort of situation?

Dave: That's all my problems in life, Dave.

Nick: How's that working?

Dave: So far as I'm aware, great.

Dave (00:59): Well — in the spirit of hopefully being better educated than we have been at certain points in our life, that's what we're gonna be talking about today. Going through some of the upsides of — we're looking specifically at, you know, the difference between Multnomah County and Clark County. So that's Multnomah in Oregon and Clark County in Washington.

Nick: Yeah. And I mean, Clark County's better, right?

Dave: Is it?

Nick: I guess that's the — why there's an episode to record. I was hoping that would be a simple yes/no, and that we could just say, "Alright, Clark County it is," and shut it down. But apparently more of a discussion to be had.

Dave: So — could be a short podcast.

Nick: I hear people love those.

Dave: Yeah. The attention spans are getting shorter.

Nick: Yeah, yeah. This is a podcast for TikTok. It's a short podcast.

Dave (02:00): Okay. So you're saying that there is more of a discussion to be had. It's not exactly cut-and-dry "Clark County is better," which is kind of surprising to me. Because here's the thing: I'm fine playing the dummy in the room on this one. 'Cause I am.

Nick: It'd be nice for you to take that role for once.

Dave: Yeah, yeah. I'll hold back on the comments — as we were kind of preparing with Claude, and how Claude wanted to frame you as the—

Nick: The inevitable foil. The fall man.

Dave: Yeah, on all of this. It's good. But — so every piece of content I think I've ever made about real estate has always been like, "Why would anyone ever, ever want to live in Oregon? Washington is where it's at, and especially for tax purposes." And we hear that all of the time. But it's apparently more complicated.

Nick: So I don't know — where do you want to begin? How do you want to frame this thing up?

Dave (02:57): Yeah, well — to skip to the end real quick, if you don't want to listen to the whole podcast, the quick answer is: long term, Washington is better. There's some instances where Oregon — and Portland specifically — might win. But the thing is, it's a small difference if we're talking sub-ten years, regardless. You really only lose in Washington if you're doing a real quick sale. And so — that's what we're getting into. We'll break down some of the differences. So maybe you wanna just start by explaining — a lot of people might already understand it, most people know: yeah, there's no state income tax in Washington. At least unless you're a very high earner.

Nick (03:47): Unless you're a very high earner — in the, I think, plus-plus-million is where there starts to be personal income tax, as of a new law passed this year. But otherwise — you know, people love Washington. No state income tax. And people know that there is income tax in Oregon.

Dave: The income tax in Oregon is tiered — like federal taxes, also. And the bucket I'd say a lot of people are gonna fall into is gonna be eight and three-quarters percent. So that's on anything more than ten thousand but less than a hundred and twenty-five thousand. And then it changes — so for this, you'll see nine-point-nine percent on state income for quite a bit of Oregon. But realistically, a lot more people are gonna fall into the eight and three-quarter percent.

Nick: So just on the hop — most people probably already know that, because they file their own taxes. Maybe you can explain what are some of the differences in real estate tax that people who maybe haven't bought here, or on the other side of the river, might not understand.

Dave (05:11): Yeah. Well, I know the most eye-popping number for every Washington seller that I've ever worked with is the excise tax. And especially if you have sold homes in Oregon, where there is no excise tax — when you're selling a home in Washington, all of a sudden you see this line item on your closing statement that's, I mean, pretty darn close to one percent of the value of the home. Actually, with the Vancouver taxes, it's more than that. So on a five hundred thousand dollar home, you're looking at about an eight thousand dollar excise tax. On a million dollar home, it's more than twice that — you're looking at a sixteen thousand eight hundred fifty-five dollar excise tax in the Vancouver area, compared to Oregon, which is a big fat donut.

Nick: Yeah. So there's a couple of things to break down. A preface to which is: if you're coming from out of state, or you're unfamiliar — Washington here calls it excise, because it is a tax on... the way they frame it is the privilege to sell property. Back home in Minnesota, we call it deed tax. So the tax is actually on the transfer of the deed to the home. So effectively, they are the same thing. In states that call it deed tax, it's usually significantly less. So back home, it's thirty-three dollars per thousand — on the sale, per thousand dollars of sale price. So that works out to point-zero-zero-three-three would be the multiplier. So on a hundred thousand dollar — three hundred and thirty dollars of deed tax per hundred thousand.

Nick (06:18): Oregon statewide does not have a deed tax. There is one exception to that, interestingly though — which you might want to know if you're looking on the south side of the river — is Washington County, which covers Beaverton, Hillsboro, and some of the western suburbs of Portland. It actually does have a deed tax that's very low. It's, I want to say, one dollar per thousand. So it's point-zero-zero-one is the multiplier. So it's — sorry, a hundred dollars per hundred thousand. So a pretty marginal tax. We're talking a thousand dollars on a million dollar sale. So we're not moving the needle a ton. But, you know, if we didn't say it, somebody would call us out and be like, "Yeah, you said there was no deed tax in Oregon." And — I'm not actually exactly sure what the history of all that is. I think it existed before some state laws — some grandfathered-in kind of deal.

Dave: Sure.

Nick: So but in general, to sell a home in Washington, we're looking at a significant cost increase over selling a comparable home in Oregon.

Dave: Yeah. And they're tiered, right? So — and we'll link to this in the show notes if you want to look at the brackets — but up to five hundred twenty-five thousand dollars, one-point-one-zero percent. Where the median home, or at least most of the sellers that we're working with, they fall into this next tier, which is like five hundred twenty-five thousand all the way up to one-point-five to five million — which then the tax increases to one-point-two-eight percent. And then it just starts to go way up. If you're from basically one-point-five to three million, you're two and three-quarters of a percent. And above — basically above three million — you're at three percent.

Nick (08:27): Three percent. And it is tiered, effectively. So it's three percent on every dollar above three million. So people — that's a common confusion about tiered tax brackets: they think once you hit a certain amount, whatever that next tier is, they're like, "My gosh, now I'm paying that." You're not. You're paying three on every dollar above three million, in this case, for Washington's excise tax.

Dave: Yeah. And about half a percent of that is local, like for basically Clark County.

Nick: Correct. So next tax, keep it rolling here, is property tax. So this is the tax you're paying every year to your local county, and then it gets distributed out to the different — well, they're city-level tax, too. We'll get into that. But it's for county services, for helping the government run. It's not a state-level tax.

Dave: What does that look like in Clark County versus in Multnomah?

Nick (10:00): Yeah. This is where I got my numbers backwards a little bit — thinking that the excise tax was about point-nine percent. It's actually, in throughout Clark County, your property taxes annually are about point-nine percent. Which is, you know, roughly nine dollars per thousand dollars of market value. So on a five hundred thousand dollar home, if that's the assessed value, you're looking at about forty-five hundred dollars a year in property taxes.

Dave: Okay. Compare that to Multnomah County — bit higher, one-point-zero-two percent. So if we're looking at that same home, instead of forty-five hundred a year, you're gonna be closer to five thousand one hundred or so.

Nick: Sure. So, you know, five, six hundred dollar a year difference on the same home, just by being in Multnomah County versus Clark County.

Dave (11:31): Yeah. And so it's also important, as we're giving you all these numbers, that we're talking averages here. These numbers do change slightly based off of what city you may be in, on both sides of the river. There may be what are called local levies — and there are some notable ones in Multnomah County that are worth getting into. Basically city-level tax that gets added onto these numbers that we're giving. So right now, we're more talking general averages across each county, to sort of be able to compare and contrast the cost of owning one versus the other. So right now we're significantly higher on excise, or transfer tax, in Washington. And then as far as property taxes go, we're doing a little bit better in Washington than we are in Multnomah County. But probably not so much that the property tax is gonna make the difference for most people, right? Like that excise tax, at least right now, that feels like the big one.

Nick: Yeah. That's what a lot of people would assume. And I guess we'd keep talking about some of this and see how it all stacks up. But some of those local taxes we were talking about — I was just mentioning a second ago — there's a lot more of in Portland specifically. And so you need to check with somebody who's familiar with your area and familiar with the numbers of any given county, because all this stuff does change based off of where you draw the line. And the same is true in Clark County too, where a portion of your property tax is based off of which school district you're in.

Dave: So are you trying to tell me right now that just because we have real estate licenses and microphones, we're not qualified to be CPAs?

Nick: You know, that's actually exactly what I was saying. Don't sue us, please. Seek professional tax advice before making any life-changing decisions.

Dave: Yeah. That's basically every lawyer's advice, is to always preface, right? And so — we're keeping the lawyers happy, if we had any.

Nick (14:00): So — you need to know your local address, because it could change. And in most cases it's not gonna be a significant change, but these are all numbers worth knowing. So Portland has SHS — SHS tax, which is... gosh, I'm trying to remember, what does it stand for? Something something — let's look it up.

Dave: Well, he's gonna look it up. There's also in Multnomah County — it's the preschool-for-all tax. So it's abbreviated PFA. And that has been a point of contention, from what I understand, currently, and keeps getting kicked back and forth in the legislature.

Nick: Just so I can have my moment of brilliance: SHS is the supportive housing services tax.

Dave: Supportive housing services tax. There you go.

Nick: So that is SHS, supportive housing services. That is specific to Portland — that doesn't necessarily cover all of Multnomah County. Multnomah County PFA tax, that's everyone in Multnomah County. Preschool-for-all.

Dave: Preschool-for-all.

Nick (15:09): So these taxes, they're not entirely agreed upon. I'm looking at my show notes here. Currently PFA is one and a half percent, and it's scheduled to potentially increase by point-eight percent. So that one and a half percent would become two-point-three percent. And they currently are saying it's gonna happen in January of twenty twenty-seven. But there's argument in the legislature — they're worried about continuing to add taxes to homes in Portland and driving people out. So currently, as it sits, it's one and a half percent, but they're talking about increasing it.

Dave (15:53): Yeah. I mean, that's remarkable. Like, as we were preparing for the episode — we'll link to this article — but there's an article called "Portland's Weirdly High Taxes." And Portland has the second highest combined wage tax in the United States, only behind New York City. And the — ECOnorthwest, which is a consulting group for Multnomah County — they found that tax avoidance is the primary driver of high earners leaving Multnomah County. And so that's a big part of the conversation, especially on this preschool-for-all and some of these taxes. One is: if they keep increasing it, how many more homeowners in Multnomah County are they going to drive out? And two: why would they increase the preschool-for-all when the number of kids in Multnomah County keeps dropping, like, precipitously? You know, it's kind of wild.

Nick: It's — yeah, it's an interesting question, and one I know I'm not qualified to answer. And not that you were asking for an answer from me, but — I think your point stands, that the tax — Portland, it has become known as a place with a heavy tax burden. Is that fair to say?

Dave: Keep Portland weird, man. Even if it means weirdly high taxes.

Nick: Weirdly high taxes. Good. So — just wrapping up the thought on Portland, in terms of just owning property. We have slightly higher property tax at a county level. And then let's just call it general local politics — it seems that they're more interested in trying to provide more services for their people at a governmental level, and they're willing to put some tax down, based off of which county, or if you're in the city or not, through property owning. So we're currently sitting one and a half for PFA, plus the one percent for the SHS tax — is two and a half. And then that's getting added onto your already-close-to-one-percent property tax.

Nick (17:11): So I mean, your income tax, you're at like eleven-point-four percent if you're kind of a median household income. And that's just your income, plus then the property taxes — compared to Washington, where your income tax is precisely, I don't know, I'm not great at math — zero.

Dave: Zero, yeah. Zero. So yeah, you multiply that by whatever you earn, and your property tax is still zero. I'm sorry — that looks good. Yeah, I said property tax. No, your income tax is still zero.

Nick: Which people like.

Dave: Yeah, that's good. That's good. So what this is adding up to is: it's not looking good for Portland. Is that what we're discovering?

Nick: So — okay. Hopefully we've laid it out. There's a lot more local tax. But Portland doesn't have any sales tax. What about that?

Dave (19:19): They don't. And here's the thing: Portland has a lot of jobs. I mean, you compare the local economy of Portland, Oregon to Vancouver, Washington, and Portland just absolutely dwarfs Vancouver. For all the growth Clark County has seen, it's still — you've got Nike and Intel and, you know, a whole bunch of massive companies that are all Portland-based. So a lot of folks are like, "Huh, I'll just live in Washington and then commute into Portland."

Nick: But if I'm not wrong — yeah, that might not be such a clean way of avoiding some of the tax ramifications. You still have to pay the tax man, Nick, even if you live over here.

Dave: So — you can't hide from just across the Columbia, or they'll still find ya. So okay — but I know that that is a question. Like a lot of folks that are like, "Man, I've been working at Nike for ten years, and Camas, Washington sounds great. If I move to Camas, can't I stop paying Oregon income tax?" And you're saying no.

Nick: The answer is maybe.

Dave: As is the clean answer to all things.

Nick: Yeah. It depends. It depends. Always. Nuance. Disclosures. You know.

Dave (20:50): Yes. Shameless plugs. If you work physically in the state of Oregon, they will still — well, they'll try — they still require you to pay tax on money earned in the state of Oregon, if you are physically there. So interestingly enough, what that means, as far as I understand it — again, not a CPA — is if you are fully remote and you do not cross over into Oregon, you are not liable for that tax. Now — this is where we'll draw the line on exposing ourselves to looking like we're giving any more tax advice than we already are. I'm not sure how many days a year you could potentially go into Oregon — like, "we're going in for a conference meeting at Nike," and now all of a sudden they're saying, "Well, you're a physical employee present at the company," and now they want — even if you work ninety-nine percent of your days remote. I would think that there would be some sort of line, and that's something you'd want to consult your CPA about. But in general, if you have a fully remote position, the whole "live in Washington and work in Oregon" is definitely a plausible route for a tax haven.

Nick: Okay. So as long as you can work remotely and have it cleared with HR and your CPA, there is the real possible arbitrage of still having your Portland — working for a Portland employer — at least as it stands currently, in twenty twenty-six. You never know what laws are gonna change, and then they're gonna say, "Any work done here for this company, we want a cut of." There's lots of places in the world that are playing that game and trying to make that happen. But at least as it stands now, you do not need to pay taxes if you work for a company — the same way, if you work for another company on the other side of the world, a lot of countries aren't necessarily — they could be headquartered somewhere else, specifically as a tax haven, and you're not gonna pay income tax to that country. Like a lot of the tech giants are tax-havened in Ireland.

Dave (23:26): But I'll flag why this is so important for our discussion here. Is because there are a lot of folks that, as they consider "do I move to Washington or do I stay in Oregon," if you're working an Oregon-based job — if you can't qualify as a remote worker and you still have to pay those Oregon taxes, this comes back to then the property tax. Yes, the property taxes are a little bit less expensive in Clark County, but not significantly less. And if you're having to spend hundreds of dollars a year in gas by commuting further — plus, I don't know if you've ever caught the I-5 or 205 bridge in rush hour, or having to cut across from Beaverton back up to Clark County — I mean, that can easily add an hour and a half, two hours to your commute.

Nick: It — yeah, it is brutal. It is not fun. And so, especially then, when we're talking timeline — you'd mentioned at the very start of the show that really, if this is a short-term home purchase, you're not planning to be in that home for more than ten years, this is where the math can start to skew towards: hey, actually, even with all of the apparent savings from Clark County — if you're not saving on income taxes, you're not saving enough on property taxes, and you're gonna have a big excise tax due — well, maybe if you work in Oregon, it makes sense to live in Oregon too. That could be the case.

Dave (24:56): So — before we draw that thread out, I wanna go back and highlight Oregon's main upside, which we accidentally breezed past. Which is: it doesn't cost money to buy anything there.

Nick: Yeah. Sales tax.

Dave: And sales tax, yeah. And so — is that part of the why there's no excise or deed tax as well? Is that consistency on their part?

Nick: You know, it's hard to say. The longer time goes on, I become of the opinion that they're gonna get their money out of you one way or another. It just depends on how good you can play the game. And so a lot of people say, "Well, you live in Washington and then do your shopping in Oregon." I don't know anyone who can be bothered to go across the 205 bridge from our little corner of Clark County to buy anything, unless they know it's like a thousand-dollar-plus purchase. Which is like — yeah, sure, it's nice to have that option if you want to go buy a car or something, you know, you're refurnishing your house or buying appliances for your kitchen.

Dave: I think a lot of people's money's going towards groceries and gas right now. And a car won't even work, 'cause you have to license it in Washington.

Nick: Yeah. So there you go. Back to my thesis — that they get it from you eventually. So people will say — I hear a lot of people who are like, "Yeah, you get to hop the river and then not pay any sales tax." I haven't seen too many people doing that.

Dave: Electronics and furniture, man. I will just anecdotally — they did try to open a Best Buy in Vancouver, over in Fisher's Landing. It lasted for nine months, and then it went out of business, because for whatever reason — like, people will not go to Oregon to buy their groceries, but if you live in Vancouver, you will absolutely travel to the Best Buy to buy your new iPhone.

Nick: It's true. It's not nothing. It's — in Washington, I think it's eight and three-quarters percent on most goods. And it changes a little bit from zip code to zip code as well, 'cause there's some different city — so some of what you might consider essentials don't get taxed, like medications and other stuff. But a lot of — I think food — no taxes on bananas, man.

Dave: Yeah. Unless it's a prepared banana at a restaurant, and then there is tax on it. Which — aren't you glad that there's CPAs in the world who handle all of this? Because it's hard to keep track of all of it.

Nick (27:38): Okay. So we're looking, and we're saying: income tax in Oregon and Multnomah County, it's steep. Alright. But how much of all this adds up to — the longer you'd be living in Multnomah County, you're gonna be paying more. How long does it take for that to offset the cost to buy and sell in Washington? The excise tax, which is the main difference. Any idea?

Dave: You're asking me to do math. I'm not that guy, Dave. Not that guy. Alright, well, I'll tell ya. But what we can tell you is that in general, Washington is better off on the whole — unless you take the income tax out of it.

Nick: Okay. So if we're talking — you're in your later years, you're retired, maybe you're just needing to live somewhere for a short while — the break-even point on Washington versus Oregon is around nine to, we'll say, fifteen years here. And so what we're saying is: the increased cost in local and county-level taxes being more than a comparative house — so we're talking Multnomah to Clark County — it will take roughly nine to fifteen years, depending on the price of the home. It would be longer the more expensive the home is, because your excise tax in Washington is larger. But in general, that increase in tax slowly whittles away — if you think of it as adding it to the bucket of the excise tax.

Dave: So if you — the conclusion to draw from this is: if you're living somewhere for just a little — if you're planning on buying or selling a home and you're thinking you're only gonna be there a short amount of time — that excise tax in Washington is a serious amount of money. And it's something that could really eat up any potential appreciation you have in your home in Washington.

Nick (29:38): We're working on a calculator right now to help people decide if renting and investing, or buying, is a better option for them. It doesn't matter how — there's little slide bars, like some of the other stuff on thetartanteam.com, to help understand where all these numbers fall. Because even guys like us, who aren't really the CPA guys but want to be able to run some scenarios — it really helps you visualize what those costs are. But regardless, on that calculator, when you're looking at renting and investing the difference you save versus buying — it almost never pays in Washington to buy if you are not planning on holding it for at least eight, nine years.

Dave: Yeah, I think seven was the lowest I could get it to to really make sense. And that's just because the excise tax is significant, and also that's factoring in all the commissions and the closing fees and all the other stuff. So if you're interested in that — we talked about that in the last podcast a little bit — we're gonna get this calculator up so you can see: does it make sense for you, based off of how long you're planning on staying? But in general, it sounds like you are right. Washington is better. How's it feel?

Nick (31:33): Well, it feels good. But I do think still that the most important factor there is the income tax piece. And so if you are somebody who has a job in Oregon, and it has to be Oregon-based — it's an office job, or you're working retail and you have to go in there, and you're earning in Oregon — that excise tax piece is a real factor that you have to consider as to whether or not it's going to make sense to move to Washington. And I would say, from what you've put together here, if you're not planning to be in a house in Clark County for nine years at least, and you're still earning in Oregon that whole nine-year period, it probably is gonna be more economically beneficial to you to stay in a home in Oregon.

Dave (32:08): Yeah. Something else worth noting here is: both states do have estate tax. So we're talking real long term.

Nick: So — maybe back up before we get to estate tax. You are correct: in general, as we sort of disclosed in the last podcast, don't buy if you're not planning on staying. That advice is local. We're talking out here on the West Coast — houses, housing is too expensive comparatively to the cost of rent, that it doesn't make sense. I was using the rent-buy calculator and running some examples from my hometown in Minneapolis. Or you could apply it to a lot of other smaller cities, that the housing stock isn't as expensive — it actually makes a lot more sense to get into a home, a starter home, a lot quicker, just because the overall housing cost is lower out there and you can start earning and saving a lot more money. Out here it doesn't. So if somebody's telling you it's gonna be the best investment of your life and to just do it because they're looking for a quick commission — that's, you know, don't rush into anything.

Dave: So that said — if you're either a local, and you've been here, or you've been here a couple of years and you're like, "This is it, I love it here in Portland metro, Southwest Washington, wherever you are" — the long-term play is to buy in Washington. All of the tax benefits, it's pretty clear. And that's probably not very groundbreaking to anyone. Anyone who has a cursory understanding of the different taxes that are involved probably already knew that.

Nick (34:07): So the last thing to mention — to put maybe the final coffin in "I'm staying here for forever until I die" — is the difference in estate tax. Oregon, on the whole, taxes any estate that — well, the way they frame it is, it's a deduction of a million dollars. So the first million of your estate is tax-free — I should say, it wasn't free to get, it's tax-free — and then everything beyond that is taxed between ten and sixteen percent. Sheesh. So if you're trying to leave anything to your kids, or your spouse, or whoever — and there's a lot of arbitrage ways and things, there's strategy here to try to reduce that amount. But in general, you need to understand that that is something at the end of your life, that if you're hoping to pass anything on to family and you've got more than a million in assets — which isn't saying very much, because the average home in Multnomah County —

Dave: I think five hundred and ninety thousand dollars is the median home price. So if you pay your house off in thirty years, and then, you know, you assume appreciation is around four percent, you're gonna be close to that just in the cost of your home. And who's to say, you know, in thirty years?

Nick: There — if comfortably middle-class means being a millionaire, there's a real chance that that threshold gets moved up. But currently, you know, if you're somebody who's later in life, that's worth knowing. It's also worth knowing that Washington's deduction goes up to three million currently. And so that's a significant amount. Now, I will say — Washington's top end currently, well, it currently goes up to thirty-five for estate tax, but they're trying to move that back to twenty percent as the top end. More than three million of assets in your estate, and you pass — it could be anywhere between ten and twenty percent.

Dave: So definitely a better tax haven if you're, say, more middle-class. If you're a really, really high-net-worth individual, then that higher percentage, currently at thirty-five, might make it make less sense to settle here. So another thing worth considering. But if you're that high up on the earnings table, you probably got this sorted. You probably don't need a Nick and Dave to tell you — you probably have a CPA who understands this a little bit better than us. Maybe even a family office.

Nick: That's likely the case.

Dave: Can I throw one more wrinkle at you?

Nick: Yeah, I don't know. Let's hear what you got.

Dave (36:42): So — worked with several house flippers. House flipping has been something that I've been interested in myself, and have been involved in some of those projects, especially in the Twin Cities. How does the excise tax in Washington versus Oregon perhaps change the math for somebody that's wanting to do real estate investing and house flipping?

Nick: It makes it difficult, to say the least. It's all — in a certain way, there is no capital gains tax. And we kind of glossed over that there is a potential for capital gains tax in Oregon, which — most people, unless they're staying in their home forty years, they're not gonna get any of that. So in Multnomah County, you could potentially run into capital gains tax on the sale of your home if it's over the federal exclusion, which is two hundred and fifty thousand if you're single, or five hundred thousand if you're married. You have to be in your home a really long time at a four percent appreciation rate to go over two hundred and fifty thousand dollars. So we breezed past that a little bit. In Washington, there is no capital gains tax — everything is excluded at a state level. You could still have capital gains tax at a federal level, but once again, you have to stay in your home for quite a while in order to hit that two hundred and fifty thousand or five hundred thousand dollars, if you're two-fifty single, five hundred married. The excise tax does make it hard. And I'd say, in my experience, looking at the housing stock out here comparatively to back home — there's really not a lot of flippers here, specifically because of that.

Nick: Of — you know, if you buy a distressed four or five hundred thousand dollar house in a nice part of town, and you sink a hundred grand into new finishes, sprucing it up, and then you try to get six-fifty or seven hundred thousand — ten to fifteen thousand dollars of excise tax, that's a significant amount of money towards you. That could be more than twenty percent of your profit, right? And I don't know — it seems to me that there's a lot more new construction and land development happening, because there's more money in that than there is in true house flipping.

Dave: Yeah. I don't know, any other input on that? It doesn't seem to happen as often here, unless it's a very high-desirability location.

Nick: Yeah. We see it more on like the multi-million dollar homes along the Evergreen Highway, just there on the Columbia River, 'cause there's some cool old nineteen-sixties, seventies homes that need a ton of renovation, and you put the money in and then you got a view of the river. Those are unique. But it seems like if you were really wanting to do house flipping, probably looking in Portland, just because of the tax benefit.

Dave: It's something, yeah, absolutely. Something worth noting for sure. The flip, or the short hold, definitely wins in Portland.

Nick (40:26): Yeah. Yep. And I think that's the helpful — I mean, it's kind of ending where we began, right? But yeah — if you're working in Oregon and you're not planning to be in the home for more than ten years, buy in Oregon. Soon-to-be-licensed there, can help with that. But if you're able to work remotely — just the income tax savings alone, by moving from Oregon to Washington, is gonna be, you know, giving yourself at least an eleven percent raise, plus a bit of a reduction in property taxes. Sure, you gotta worry about excise, but only when it actually comes time to sell. And if you stay in the house for ten-plus years, you really don't have to worry about it.

Dave: Yeah, they're gonna ding you on sales tax, but at least when you gotta make that trip to Best Buy — Portland's not far away.

Nick: Good, good.

Dave: Well, hopefully that was helpful. Quick breakdown of what the differences are. It sounds like the initial thesis you posed was correct, though. Washington — which, I love it when you tell me I'm right.

Nick: Yeah, well. It has to happen eventually, right? Once in a while.

Dave: Even a broken clock, right — twice a day. So that's good.

Nick: Yeah. This is great.

Dave (42:19): Well — if you would like to talk more about your situation: thetartanteam.com/book. We would love to help run these scenarios. Links in the show notes to some of the tools that we had referenced — articles, that calculator that Dave mentioned, that'll be live by the time this episode goes live. And then, as we've qualified many a time, you probably don't want to book a call with us to talk about the minutia of your tax situation. But if you are looking to connect with a good CPA — we've made a few good connections locally, and would be happy to share those contact details with you. Just go ahead and reach out. Dave at thetartanteam.com, Nick at thetartanteam.com — you can reach either of us that way too.

Nick: Yeah. Hopefully, if you're interested in buying — real quick, before we go, there's something we have to touch on. Which is: at the end of the day, I think one of the bigger takeaways is, we're in a ten-year scope — we're really splitting hairs here on the dollar-for-dollar difference, right? It can be significant, but depending on your — for a lot of people, it's not going to be that different. If you're very focused on saving and you have really strict financial goals, you would probably pick Washington. But in general — money isn't everything, right?

Dave: Yeah. I guess that's a good qualifier. Maybe the — you know, we do a whole podcast and talk about how you can save this much money if you live here and you do this thing, and it's like, at the end of the day, loving where you live is way more important.

Nick: Exactly. You could have saved a hundred and twelve dollars, had you moved across the river — despite the fact that you're sacrificing being thirty, forty minutes away from all your friends and family.

Dave: And so — we absolutely don't want this to come off as "yeah, you gotta live in Washington." You should live where it makes sense for your lifestyle. And if that happens to be in Washington, we want to help you find a great house that the numbers make sense on. And it's more so just: have a conversation, get people thinking about, "Alright, well, what are all the actual implications?" Because so few people ever get that explained to them clearly. And maybe if this wasn't the clearest — like Nick said, we'd be happy to talk with you about this and point you to people who can really dive into this in your situation.

Nick: So I just want to put that preface in there of, like — hey, it is money, but money's also not everything.

Dave: That's right.

Nick: And if it were, Washington probably wouldn't be the best. You know, like, if really tax optimization is what you're going for, there's probably some Southern and Midwest states that might be worth a closer look.

Dave: So that's a point well taken.

Nick: You gotta live your life. And yes, these are factors — especially when you're comparing metros or areas as close to one another as Multnomah County and Clark County. But all of this stuff is figured out in conversation. And that's really what we exist for: to just help you think through these things well, be sounding boards, and come to decisions that you feel glad you made five, ten, fifteen years down the line.

Dave: Absolutely. Rock on. Well, to that end — be sure to subscribe to the show, share it with somebody that you know thinking about buying a home, and get in touch with us. We'd love to chat with you. See you in the next one.

Nick: See you in the next one.

Dave: Bye.