(The Center Square) – Although it’s been just a day since Gov. Bob Ferguson signed a new state law imposing a 9.9% income tax on households that make $1 million, many wealthy residents haven’t waited around for the bill’s actual signing before putting the “for sale” sign on their home.
Realtors argue this surge in high value homes in the Seattle area sales indicates a capital flight that could potentially undermine the state’s economy.
“Everybody is hedging their bets and slowly moving their entire base to other states that are tax havens,” Kirkland-based Sotheby’s International Realty realtor Susan Culverhouse told The Center Square. “They’re not sitting ducks. Wealth is mobile. A lot of them are taking their companies with them, which to me is scary.”
Dean Jones is the CEO of Realogics Sotheby’s International Realty. He told The Center Square that “savvy sellers are getting ahead of the curve. They’re not waiting for the ballot measure (to repeal the income tax) in November. Sophisticated investors and high net worth families are just going to hedge. Getting ahead of the curve makes sense.”
Their observations match recent data obtained from Northwest Multiple Listing Service showing a dramatic increase in real estate activity so far in 2026 in King County involving homes worth $5 million. Compared to the same timeframe last year, new listings are up by 40%, pending listings up by 78%, and sales up by 66.7%. However, the increase in activity could be even higher, as NMLS only includes public sales.
The departure of many wealthy or high-income earning residents from Washington has caught the notice of realtors such as Realogics Sotheby’s International Realty. In Nevada, the Bellevue branch recently launched a “Believing Las Vegas” campaign to highlight properties such as new Four Seasons private residences.
Although the realtor notes “it would be too narrow to describe Las Vegas only as a tax shelter,” regarding the state’s lack of an income tax it observes that “for high-net-worth households evaluating long-term residence strategies, this matters. Especially now.”
“Voters have feet,” Jones said. “Some are reprogramming their domicile. I went down to Nevada about a month ago, and saw firsthand what’s happening.”
While the homes Jones’ company tout as part of the campaign run a pretty price, with some properties listing as high as $20 million, both Jones and Culverhouse noted that many buyers aren’t departing Washington for good, but merely establishing formal state residency elsewhere.
“They’re getting second homes in Austin, Las Vegas, but also in Tennessee,” Culverhouse said.
Jones said it’s not just the new millionaire’s tax prompting the wealth migration, but the state’s capital gains income tax as well as its high estate tax. Ferguson recently signed SB 6347, which lowers the estate tax rates that previously could be as high as 35%.
“A lot of the truly affluent family are being very mindful of the state where they’re registered,” Jones said. “The ultra high-end, super prime real estate market….are going to be less sensitive to the nuance of mortgage rates and more sensitive to the nuance of tax planning.”
If it’s an indication of capital flight, it’s not something that started just now, the Mountain States Policy Center Founder and CEO Chris Cargill. In a recent article he noted that Washington lost half a billion dollars in wealth from 2022-2023 – just as the state was implementing its new capital gains income tax. The data suggests that the consequences will be measurable—in dollars, in jobs, and in opportunity. And once wealth leaves, it rarely returns on its own.”
Yet, Jones said these trends are not at the expense of Washington’s real estate value. The high value homes sold are bought by others looking to move into larger residences, while the sellers then shift into the condo market in places like downtown Bellevue.
“They’re effectively creating the West Coast version of billionaire’s row,” Jones said. “Those same people concerned about the income tax or estate burden are increasingly aging and looking for a lock n’ leave lifestyle and planning on spending six months in another location.”
“They’re just reestablishing their residency in other states to avoid the potential tax burden,” Culverhouse said. “They’re not really leaving. There used to be a saying that you ‘make your money in Washington and then moved to California,’ because their estate taxes aren’t as bad. Now you can’t make money in Washington. What’s the driver to keep people or bring them here?”
While Jones said he’s concerned with the regional economy, he is overall optimistic about Washington long-term future – provided the new income tax rate isn’t lowered.
“There’s others that will happily participate (in the state economy), because maybe they will avoid penetrating the $1 million threshold and they understand we have an abundance of talent, especially in tech,” he said.
However, Culverhouse said she fears the tax will get lowered further. “It’s a foot in the door approach. What’s going to be on the table next time?”
Senate Majority Leader Jamie Pedersen, a Seattle Democrat who sponsored the income tax bill, could not immediately be reached for comment
