Washington Governor Bob Ferguson signed Senate Bill 6346, a 9.9% “Millionaires Tax” on household earnings over $1 million annually, into law on March 30.

“This is truly a historical step forward in rebalancing our tax code,” Ferguson said at the signing. “It’s the right thing to go for Washington’s working families. It’s the right time to do it. It’s the right policy.”

Forty-one states tax millionaires as part of standard income taxes, although Washington is the sixth state to enact tax law specific to millionaires.

The law is set to take effect on Jan. 1, 2028, meaning affected households will be taxed based on 2028 income (first paying this higher rate when taxes are due in April 2029).

Notably, households will only be taxed at that rate for income over $1 million (for example, a household earning $1.4 million annually would only be taxed at 9.9% on $400,000).

Currently, millionaire households in Washington pay about 4% of their income in taxes, compared to about 11% for median-income households and 14% for low-income households.

The state’s Budget and Policy Center estimates that about 20,000 households in Washington would be affected — less than 1%.

That would generate over $3 billion in revenue annually, the organization said, with funds going toward education, healthcare, tax offsets, including a Working Families Tax Credit, and public defense services.

Public opinion on the Millionaires Tax

While supporters argue that Washington’s wealthiest residents will now pay their fair share in taxes, detractors of the bill worry that the change will send people fleeing to tax-free havens like Nevada and Texas.

What’s more, initial concerns were spurred by a 65% annual increase in active home listings priced $2 million or more the day after the bill was passed by the state legislature on March 12. The state had 53 such high-value listings that day, up from 32 on the same day in 2025.

However, Windermere Real Estate Principal Economist Jeff Tucker said that while high-priced home listings have risen year over year, the listing anomaly on March 12 isn’t necessarily a good indicator of an impending mass exodus out of Washington.

“I’d be very hesitant to use single-day new listings data, both because a single day is a noisy, small sample of housing market activity, and because the number of new listings varies by day of the week,” Tucker told The Center Square. “I’m also skeptical that many sellers, especially of such high-end properties, were prepared and rushing to list on exactly the day after legislation was signed. Deciding to move and preparing to market a listing takes time.”

The Citizen Action Defense Fund, a conservative advocacy group, will file a lawsuit against the state in response to the new law, citing a 1933 Washington Supreme Court case that classifies income as property.

Brokers oppose the Millionaires Tax

While support of the bill — or lack thereof — is split along party lines among the general public, brokers in Washington largely oppose the new law.

“Opposition to a proposed millionaire tax in Washington isn’t merely about resisting taxation. It’s about what this signals for the future of our state,” Jen Cameron, managing partner of The Agency Seattle, told Seattle Agent. “I’ve built my business here, I believe in this market and I’ve seen firsthand what makes Washington so attractive. A big part of that has always been consistency and predictability, something that allows people to invest, grow and stay. The moment we start shifting that foundation, even with the best intentions, we introduce uncertainty, and that’s something high-level decision makers pay close attention to.

“Washington has long differentiated itself with no income tax, and once that precedent shifts, it raises reasonable questions about where the line is drawn over time,” Cameron continued. “High earners, investors and business owners aren’t just looking at today’s policy — they’re evaluating what comes next. Even the perception that thresholds could expand or rates could evolve can influence decisions at the highest levels.”

Cameron added that a Millionaires Tax could make a competitive market like Seattle lose its “edge.”

“We already operate in a high-cost environment, and while our strengths, talent, innovation and global connectivity are undeniable, incremental policy changes can start to chip away at our edge compared to states actively courting wealth and business,” said Cameron. “I don’t believe we’ll see a mass exodus, but that’s not really the point. The real impact happens at the margins, where high earners have flexibility and capital is more mobile. Those quieter shifts don’t make headlines, but over time, they matter.”

That’s a sentiment echoed by Max Rombakh, managing broker of Windermere Real Estate – Yarrow Bay.

“In my 22 years in this business, one of the strongest drivers of our market has been buyers relocating from California and other high-tax states,” Rombakh said. “People moved here for jobs but stayed because of the nature and also because Washington had no income tax.”

That selling point has been a “shelter” for high-net worth individuals, Rombakh said.

“I’m already seeing a noticeable drop in calls from out-of-state buyers who would have otherwise been serious about relocating here,” Rombakh explained. “High-net-worth buyers, particularly business owners anticipating significant liquidity events, are reconsidering Washington as their home base, and that has a direct ripple effect on the luxury segment. When your most active buyers start evaluating Nevada or Florida as alternatives, you feel it.”

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