Real property is taxed based on its classification. Classification is the grouping of properties based on similar use. Properties in different classes are taxed at different rates.
A tax rate is the amount of tax on each $100 of the assessed value of the property. The rates are established by the Council of the District of Columbia and may change from year to year.
How the Real Property Tax Is Computed
The amount of tax due is determined by dividing the assessed value of the property by $100, then multiplying that amount by the rate for the class associated with the property.
For example, assume your property is classified as Class 1, which means your tax rate is $0.85, and your house is assessed at $100,000. To determine the tax, divide $100,000 by 100. That amount is $1,000. Then multiply $0.85 by $1,000. Your annual tax is $850 (before the homestead deduction, senior citizen deduction, and/or trash credits).
If your property is classified as Class 2, and your property is assessed at a total value of $3 million or less, then your tax rate is $1.65. If your property is, again, assessed at $100,000, divide $100,000 by 100. That amount is $1,000. Then multiply $1.65 by $1,000. Your annual tax is $1,650.
If your Class 2 property is assessed at $3.5 million, however, your tax is computed by a split rate of $1.65 for $3 million of the property assessment and $1.85 for the balance ($500,000): Divide $3 million by 100. That amount is $30,000. Multiply $1.65 by $30,000. That result is $49,500, which is the tax on $3 million of the total assessment. The balance of the your total assessment, $500,000, is divided by 100. That amount is $5,000. Multiply $1.85 by $5,000. That result is $9,250. Your total annual tax is the sum of the tax on $3 million ($49,500) and the tax on the balance of $500,000 ($9,250), which totals $58,750.
Current Classes and Rates
The following are the current rates. For more information about the Class 3 and Class 4 tax rates, visit Vacant Real Property.
Real Property Tax Rates
|Class||Tax Rate per $100||Description|
|1||$0.85||Residential real property, including multifamily|
|2||$1.65||Commercial and industrial real property, including hotels and motels, for the first $3 million of assessed value|
|$1.85||Commercial and industrial real property, including hotels and motels, for assessed value more than $3 million|
|3||$5.00||Vacant real property|
|4||$10.00||Blighted real property|