Washington is changing, and it is catching the wrong people off guard

For years, I have heard the same sentence from people up in Washington, especially on the west side: “We do not have state income tax, so we are good.” And to be fair, that used to feel like the end of the conversation. But lately, the rules and the math have shifted enough that I am getting a very different kind of call, and I am getting it more often.

In the last week alone, I had four or five different people reach out, all from Washington, asking some version of this: “If I sell stock, or I sell a business, or I cash out a big investment, what happens now, and does it change where I should live?” That is not small talk. That is a planning conversation that can change someone’s life, and it is also one of the reasons Reno, Nevada and Northern Nevada are suddenly showing up on more short lists.

Here is the big idea that keeps getting missed: the biggest mistake is not where you move, it is when you move. If you make your move after the sale, after the liquidity event, after the stock sale, after the business sale, in many cases you have already locked in the tax outcome. On the other hand, if you move before the sale, you may be able to change the outcome dramatically. That timing piece is quietly influencing what we are seeing in the Reno and Sparks housing market right now, because the people thinking about it tend to be decisive, financially prepared, and very aware of the numbers.

What actually changed in Washington, in plain English

Washington has been moving toward a capital gains tax, and while I am not your CPA and I am not trying to give legal advice, I can absolutely explain why this has gotten people’s attention.

The simple version people are discussing goes like this:

• Roughly the first 250, 000 to 270, 000 dollars of gains may be exempt, depending on the specifics.
• Gains above that amount up to around the first million dollars are discussed as being taxed at roughly 7% at the state level.
• Anything above a million dollars is discussed as being just under 10%, which is why people call it a “millionaire tax.”

Now stack that with federal taxes, and potentially the additional 3.8% net investment income tax, and those numbers stop being theoretical real fast. A two million dollar gain can turn into a tax bill that makes people sit down and do a long stare at the wall. In the video, I mentioned a rough example where it could land around 600, 000 dollars or more once you stack the pieces. The exact number depends on your situation, your filing status, and the type of asset, but the point is this: for the right person, this is not a “minor change, ” it is a lifestyle changing number.

Who this really hits, and who it does not

This is not something that affects everyone equally, and that is important. Most households are not suddenly going to have a huge capital gains event. But the people who are feeling it, and the people who are calling, tend to cluster in a few groups.

Tech employees with RSUs and stock

If you work in tech, have been compensated with RSUs, or have built up significant positions over time, a sale can create a large taxable event. A lot of folks are not thinking about state level exposure until they are close to selling or exercising, which is why the surprise can be brutal.

Business owners preparing for an exit

Business owners are often in the middle of something bigger than a paycheck. They are building an asset, and when they sell it, the gain can be substantial. If you are five years out, you have options. If you are five months out, the timeline starts to matter.

Investors and high income households

Some households are not “selling a business, ” but they do have a large portfolio, a concentrated position, or a real estate investment strategy that creates a sizable gain. Again, not everyone, but the people who do fit this category tend to be the same people who can move and reorganize quickly.

And here is the theme I keep hearing: these are not emotional decisions. People are not calling me to argue about politics. They are calling because they did the math and realized they have choices.

Why Reno and Northern Nevada are getting pulled into the conversation

When people in Washington start feeling pressure, they naturally look around the map. Sometimes they consider Idaho, Montana, Utah, Arizona. But Nevada keeps popping up because it is simple to understand.

• Nevada has no state income tax.
• Nevada has no state capital gains tax.

That alone can change the after tax outcome of a large sale. But it is never only about taxes, even when taxes are the spark that starts the conversation.

What happens next is people start layering in the day to day reality, and this is where Reno, Nevada starts to make a lot of sense for a certain kind of buyer. If you are coming from the west side of Washington, especially the Seattle area, you notice the pace change quickly. You also notice the access to the outdoors, and how fast you can get from “work mode” to “I am on a trail” or “I am at the lake.”

Reno sits in a pretty unique spot. You are still close enough to the West Coast that you can do business in Washington or California, especially now that remote work is more accepted. You have Lake Tahoe in your backyard, and you have a metro area that is large enough to have real amenities but small enough that it does not feel like constant chaos.

A quick real world snapshot from my phone this week

I want to share one small anecdote from the video because it explains the trend better than any headline. In the last week, I had multiple calls from Washington, and they were all very specific. One person was getting ready to create a big asset for themselves, another was preparing to sell a business. These were not casual “maybe someday” calls. These were calculated “we need to understand timing and housing options” calls.

That is also why you may see it show up in the housing market before you see it in the moving truck count. When people are planning a major sale, they often start by learning the target market, checking neighborhoods, and getting a feel for what life would look like. Then they make their move, sometimes quickly.

The part that does not show up in a spreadsheet

Even though taxes are front and center in these conversations, most people are not going to move solely because of one line item. What I hear over and over is that it feels like one pressure after another, and eventually the stack gets heavy enough that people say, “Why am I staying put if I do not have to?”

In the transcript, I talked about broader environmental factors people are feeling on the west side, including reports of high office vacancy rates in parts of Seattle, businesses downsizing, and some leaving. Whether that is your world or not, it creates a vibe. People start asking bigger questions.

• Do I still need to be here to do my job?
• Is this still the best place to build wealth?
• Why does it feel like I make good money but keep less each year?

Those questions are not solved by a tax rate alone. They are solved by a lifestyle plan.

The timing trap, and why “when you move” matters more than people think

Let me be really clear here because this is where people can accidentally light money on fire. The taxes on many large asset sales are based on your residency at the time of sale. That is the whole game. If you sell first in Washington and move later, the move may not help the outcome of that sale.

On the flip side, the people who plan ahead will often relocate first, establish residency, then sell. That is the order of operations people are trying to understand when they call me.

I am a Realtor, not a tax professional, so I will say it the same way I said it in the video: you need to talk to your CPA and your attorney, and get real advice for your specific situation. My role is to help you understand what moving to Reno, Nevada or Sparks, Nevada actually looks like, what neighborhoods fit your lifestyle, and what the housing market is doing while you make those bigger plans.

What we are seeing in the Reno and Sparks housing market

Is this a massive wave? Not yet. But it is noticeable because of who the buyers tend to be. The Washington buyers calling lately are typically financially strong, strategic, and ready to act once they have clarity. They are often coming from the west side markets like Seattle, Tacoma, Olympia, and up the corridor, because that is where a lot of the concentrated wealth and tech compensation lives.

Practically speaking, that means a few things for Northern Nevada:

• Some buyers are looking for homes that support remote work, like an extra bedroom or dedicated office space.
• Some want low maintenance housing because they are traveling back to Washington or California for business.
• Some are comparing the total cost of living, not just the home price.
• Many want proximity to outdoor access, because if you are going to move, you want the lifestyle upgrade too.

If you are early in your research, one of the best ways to get your bearings is to browse areas that match how you actually live. We keep a running list of communities and local overviews here: https://thelessingerteam.com/neighborhoods

How to think about Reno as a relocation target, beyond the tax conversation

When people ask me if Reno is “worth it, ” I usually ask one question back: what are you optimizing for? Because Reno is not a copy of Seattle, and it is not trying to be. It is Reno. It has its own culture, pace, and tradeoffs, and that is exactly why a lot of families love it.

Proximity without the constant congestion

You are still connected to the West Coast. You can get to California quickly, and you can still run a business that has clients elsewhere. But your daily life is not as dominated by traffic and friction.

Outdoor lifestyle that is actually usable

Lake Tahoe is not a marketing phrase for locals, it is a real part of life. People ski, hike, paddle, and take quick weekend resets. If you are moving for a better life, that matters.

Cost of living, in context

Reno, Nevada is not “cheap” in the way it was 15 years ago, and I am not going to pretend it is. But compared with many west side Washington neighborhoods, the overall cost, space, and housing options can feel like a release valve.

Practical next steps if you are considering moving from Washington to Reno

If you are even thinking about relocating, especially if you have a potential asset sale coming up, treat this like a project. You do not need to rush, but you do need to be intentional.

• Start with timing. Talk to a CPA and attorney early, not after the sale is scheduled.
• Define your must haves. School priorities, commute needs, office space, yard size, weather tolerance, and proximity to Tahoe.
• Explore neighborhoods with purpose. Reno and Sparks both have pockets that feel very different.
• Watch the market for 30 to 60 days. You will learn pricing, inventory patterns, and what “normal” looks like here.

If you want help mapping out areas that match your lifestyle, or you just want a local sounding board before you get on a plane, reach out to us. These are conversations we are having over and over, and we can help you connect the dots on what it would be like to live here, how buying works in Nevada, and what you should pay attention to as a relocating household.

Want the day to day version of Reno, not just the headlines?

A blog post can help you understand the big picture, but sometimes you want to see it, neighborhoods, drive times, what the streets feel like, and what locals actually do on weekends. If that is you, check out the channel. We do our best to keep it practical and honest, because moving is stressful enough without sugar coating.

Conclusion: taxes may be the trigger, but lifestyle is usually the reason people stay

Washington’s changing tax environment is making certain households pause, especially tech employees with stock, business owners prepping for an exit, and investors with big gains on the horizon. For those folks, the numbers can be large enough that relocation becomes a real option, not just a daydream. And when you pair that with remote work flexibility, Reno, Nevada starts to look less like a random idea and more like a logical plan.

The key takeaway I want you to remember is simple: timing matters. If a major sale is coming, you want to understand residency rules, and you want to plan ahead with professionals who can advise you correctly.

If you are in the research phase and want to keep learning about Northern Nevada housing, neighborhoods, and daily life, you can explore other posts here: https://thelessingerteam.com/blog

Transcript

Most people still think the state of Washington is a no-income tax state, but the rules lately have been changing and for the right kind of person that change can be a brutal surprise. So, in this video what I'm going to do is I'm going to break down what actually shifted in the state of Washington, who it really hits, and whether it's RSUs or stock sales or business owners or investors, and why Reno and Northern Nevada >> [music] >> is suddenly showing up on the short list of people thinking about moving here when they start doing the math. So, stick with me for a little bit because the biggest mistake isn't where you move, [music] it's when you move. And if you move after the sale of some of those assets I just mentioned, you've already lost. So, if you move before the sale, you can completely change the outcome, especially financially, and that timing is quietly influencing the Reno and Northern Nevada housing market right now. So, I want to run you some through some numbers of some people that recently called us. So, the reason why I want to talk about this is literally in the last week I've had four or five different people, all from the state of Washington, reach out to us. And here's what they've been talking about. I want to get really clear on what's actually changing. Washington is in the process of introducing a capital gains tax. And what I want to talk to you about is the simple version it works, and these won't be all the details, but you can look that stuff up online. So, roughly the first 250 to 270, 000 dollars of these projects or these sales would be exempt. But then any income that you made up from there up to that first million dollars is going to be taxed on roughly 7%, and then anything above a million dollars, and that's why you're hearing people calling it the millionaire tax, is basically going to be just under 10% of that. So, whether you sell stock or whether you sell a business or whether you make some sort of big investment game, these are now going to be real expenses that people are paying. That's just for the state. If you still have federal taxes on top of that, potentially another 3.8% in investment tax. And so, these numbers start to get real real. And if someone is selling an asset and makes, let's say, a two million dollar gain, by the time you stack it on the federal tax, the investment tax, and now what Washington, the state of Washington, piece is going to be, you could be looking at roughly 600, 000 dollars or more going to taxes. And those are not just small changes. Those are the kind of numbers that are causing people to reach out and call me on the phone and say, "You know what? I'm thinking about relocating my business, relocating my life." And those are huge, I want to say, lifestyle changing numbers. So, who are the people that are actually this hitting? This is not something that's going to affect everybody cuz the example I gave is just, of course, a two million dollar gain. But this is kind of very targeted at very specific people. And the people that are going to feel this most, and the people that are calling, not just from Washington, but some of the surrounding states, is tech employees that maybe own stock with RSUs or business owners that are getting ready to sell or investors or even high just high-income households. they start doing the math, they realize something pretty damn quick, that they don't have to stay where they are. And it becomes less now about politics and about the city they live in, but it becomes more of just a math equation. And we're already seeing that movement where people are reaching out and calling me on a more regular basis. So, here's some stats for you. Washington lost nearly 19, 000 taxpayers in a single year last year, and that was about 1.6 billion dollars in income that left the state. And these are not just people moving, that's money leaving the state and it's tax revenues that are leaving the state. And here's the part that people aren't talking about enough. And it's not just the taxes, but it's the overall environment. So, if you live on the west side of Washington, you've got parts of Seattle where office vacancy rates have been reported at 30 to 35% or more vacancy. You've got businesses that are downsizing and some are leaving altogether. And they're starting to rethink everything about why they're doing business on that west side, especially of Washington, cuz that's where most of the people that have been calling us from, whether it's Seattle or Olympia or Tacoma or Belling anything up that west side. And when that starts happening to a state, people start asking you know, bigger questions for themselves. Do I still need to be here? Is this still the best place for me and the best state for me to build wealth? And here's the part that doesn't show up in the spreadsheet, the part that people are just they're they're starting to feel they're making good money, but every year it feels like they're making less and less and less or they're getting to keep less and less because it's so expensive where they are. So, it's not just a one issue thing, but that big issue of all that stuff is what's causing that initial phone calls, and then it just becomes this accumulation of one pressure after another. So, why are states like Nevada winning? Well, here's what happens. People in states like Washington, that pressure starts to build and they start looking for options. So, whether they start looking whether it was Idaho or Montana or Utah or Arizona, they're looking for places to go and then they start to realize a state like ours in Nevada starts to stand out for them. Because Nevada, we don't have an income tax, we don't have a capital gains tax. And now if you start doing just some very simple comparisons, the same person living in Washington that did it here, the same investment that they did in Washington that they might do here, you get completely different, especially financial outcomes. And if the numbers become big enough, that's when you see them start to say, "Hey, I got to get the hell out of here." So, you can sell the exact same asset in Nevada and keep so much more of your money. And then as you start to layer in extra things like we have a lower cost of living here than you on the west side, especially in Seattle. We have more space, more room to go, a slower pace. I don't know if you've flown into the Seattle airport lately, but it's chaos. And if you try to go from there to downtown Seattle, there is just a lot going on. But if you move here, you're still close to the west coast, and Reno starts to make a lot more sense with whether your business is still in Washington or you're doing things in California. And so, people are just starting to look at that more and more and more. We'll see how many people actually relocate here, but I know for me recently, my listings are starting seeing buyers from other agents from Washington, and I'm just starting to see a lot of people reach out to me saying, "Hey, we're getting the hell out of here." So, so if you're someone who's thinking about moving to Northern Nevada, do me a favor. Click the link in the description below right here and we'll get you a copy of our free buyer's guide that'll give you some great information to start your journey to Northern Nevada. Here's the mistake you got to be careful of, and there's a timing mistake, especially if you're trying to relocate a business or you're starting to create some big assets for yourself. And this is the part where some people are starting to miss it, and you want to make sure that you don't. If you were to move here, you got to move here first because the taxes on all these assets that you were going to sell are based upon your residency at the time of sale. So, the people that are thinking ahead, they move here before they sell their business. They move here before they set that, you know, sell their assets, and they get everything set up in Nevada before they make their big move of all the other stuff. So, if they sell all that stuff up there first and then they move later, by then, it's too late. You've already caused those tax consequences for yourself. So, you want to pay attention and make sure you move here first and then start bringing all those other things with you. So, you need to talk to your CPA, your lawyers, your tax accounts, all those kind of things cuz I'm a real estate agent. I just want to make sure that I'm not giving advice that I'm not, you know, willing or or able to give or talk about things I'm not up to speed on. So, here is what really changed and here's what's causing this to happen more than ever is people able to work remotely. Businesses are much more flexible about where they have to be. People don't have to stay where they used to be. So, now as those numbers and that math starts making way more sense to be in a state like Nevada, they can do something about it, and you're starting to see people make those moves. So, what are we seeing here? I'm having more and more conversations than ever before from people from the state of Washington. At this point, it's still not huge massive numbers of people, but it's typically very specific buyers. It's people that will have money that are financially strong, that are being strategic and very aware of what they're doing. And again, like I said, I had three or four people reach out to me this week, and one was getting ready to create some big assets for themselves, one was selling a business. And typically though, these are all people on the west side of Washington, okay? That's where the wealth is, that's where they're making these moves from. And they are not emotional about it at all. These are smart, calculated decisions that they've been thinking about for quite some time. So, here's what you need to know, and at the end of the day, here's the truth of the matter. People aren't going to move just because of the tax consequences, but taxes sometimes become the trigger, things they think about that all of a sudden they realize the numbers are so huge that once they take that and they combine it with the lifestyle that they can have down here in Nevada, the cost of living they can have here in Nevada, and how people actually want to live somewhere where it's a little slower pace and they can enjoy themselves more, that's when the conversations start, that's when people start making the real moves, and that's when states like Washington that are starting to change their policy, people don't argue with the policies anymore, they just grab their stuff and they move. And right now, some of that movement, and it's happening from more states than just Washington, are coming straight to Nevada. So, if you're someone who lives in the state of Washington and you're thinking about making a move to Reno or you just want to understand how all this might affect your specific situation, reach out to us cuz I'm having these conversations over and over, and we can tell you all the things that you need to know about what it might be like to live here, how things might be different down here, and the benefits of moving your business and your life to a place like Reno and Northern Nevada. So, if you're someone who's thinking about moving here from the state of Washington and you're wondering, is Nevada affordable or not? Check out this video we did right here.