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Real Property Tax Relief and Tax Credits

District of Columbia property owners may be eligible for property tax relief. The District offers several programs to assist property owners and first time homebuyers. Select from the following programs to check eligibility and filing requirements.

For more information about these tax relief and credit programs, contact our Customer Service Center at (202) 727-4TAX (727-4829).

Assessment Cap Credit

The housing market in the District of Columbia has caused a surge in the assessed value of residential real property. In an effort to limit the increase of real property taxes for homeowners, eligible homeowners will be provided an Assessment Cap Credit.

The Assessment Cap currently provides that a property may not be taxed on more than a 10 percent increase in the property’s assessed value each year. This credit does not reduce the assessed value of your property on the tax roll or the assessment notice, but it will appear as an automatic credit against your real property tax bill.

If you have been denied the Assessment Cap Credit and you believe that you are eligible, please contact the Homestead Unit, PO Box 176, Washington, DC 20044 or call Customer Service at (202) 727-4TAX.

First-Time Homebuyer Individual Income Tax Credit

For homes purchased on or before December 31, 2011.

This federal tax credit is available to first-time homebuyers in the District of Columbia. The credit is the smaller of:

  • $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er) ($2,500, if married filing separately) or
  • The purchase price of the home.

In general, you may claim the credit if:

  • You purchased a main house during the tax year in the District of Columbia, and
  • You (and your spouse, if married) did not own any other main home in the District of Columbia during the 1-year period ending on the date of purchase.

Income restrictions and other qualifications may apply. You must file the federal form 1040 to claim this credit. For more information, contact the Internal Revenue Service at (800) 829-1040 or visit the local IRS Taxpayer Assistance Center at 500 North Capitol Street, NW, Washington, DC.

Historic Properties

For information on special District programs for historic real properties, please contact:

DC Office of Planning
Historic Preservation Division
801 North Capitol Street, NE, Suite 3000
Washington, DC 20002
Phone: (202) 442-8800
Fax: (202) 535-2497

Homestead Deduction

This benefit reduces your real property's assessed value by $67,500 prior to computing the yearly tax liability.

The Homestead benefit is limited to residential property. To qualify:

  1. An application must be on file with the Office of Tax and Revenue;
  2. The property must be occupied by the owner/applicant and contain no more than five dwelling units (including the unit occupied by the owner); and
  3. The property must be the principal residence (domicile) of the owner/applicant.

If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead benefit for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the benefit reflected on the second-half tax bill (and full deductions for all tax years in the future).

The Homestead Deduction application is available by visiting Real Property Tax Forms.

  • Appeal of Homestead/Senior Citizen Status [PDF]
  • Cancellation of Homestead Benefit

Properties will continue to receive the Homestead benefit and/or disabled or senior citizen tax relief as long as there is no change in eligibility, such as property ownership or owner-occupancy status. Owners of properties receiving these tax benefits are responsible for notifying the agency when eligibility ceases. Written notice, including the square and lot of the property, or a completed Homestead cancellation form, must be sent within 30 days of a change in ownership or owner-occupancy status to:

Government of the District of Columbia
Office of Tax and Revenue
Real Property Tax Administration
1101 4th Street, SW
Washington, DC 20024

The cancellation form for these tax benefits is available on the Real Property Tax Forms page.

 

  • Homestead Reconfirmation Audits [PDF]
  • Information for Co-op Housing and Property Transferred to a Trust

To qualify for the Homestead Deduction in the case of a cooperative housing association, the unit must be occupied by the shareholder (or member) as his/her principal residence (domicile), and the benefit is granted to the cooperative (which will supply and collect the applications).

In the case of property transferred to a trust, the property may qualify for the Homestead benefit if:

  • The property was eligible for the Homestead benefit before the transfer;
  • The property is transferred to a revocable trust;
  • The transfer is not for money (or other consideration); and
  • The property remains the principal place of residence of the applicant/transferor/trustor before and after the transfer.

Individual Income Property Tax Credit

The Individual Income Tax Credit reduces the DC individual income tax liability of eligible homeowners and renters by up to $750. If your household's total income is $20,000 or less, you may be eligible.

To apply, file a Schedule H (Property Tax Credit Form) with your Form D-40 (Individual Income Tax Return). These forms are available in Tax Forms/Publications under Individual Income.

Limited-Equity Cooperative Tax Fairness

Limited-Equity Cooperative Tax Fairness is a new program for tax year 2006 that was passed by the DC Council to recognize the nature of limited-equity co-ops (LEC) and their valuation.

The assessed value of residential real property owned by LECs is the lesser of the following three approaches to value:

  1. The aggregate estimated market value of proprietary lease, stock, or other interests in the co-op association as of January 1 preceding the date of assessment, or
  2. If information is insufficient, the estimated market value of the property is assessed as if it were a condominium determined under the comparable sales approach multiplied by 70 percent, or
  3. The annual amount residents pay in carrying charges (excluding subsidies), divided by an appropriate capitalization rate as determined by OTR. If property ceases to be an LEC, then it will be assessed under either (1) or (2) above.

"Carrying charge subsidies" are any payments originating, directly or indirectly, with a federal or local government housing agency and used to supplement the monthly housing payments of a co-op member.

Interested LEC owners should submit the Limited-Equity Cooperative Tax Fairness application found in the Tax Forms/Publications section under “Real Property,” or call the Customer Service Center at (202) 727-4TAX (727-4829) for more information.

Lower Income Home Ownership Tax Abatement

Eligible homeowners, including non-profit organizations and shared equity investors, may receive a five-year tax abatement and be exempt from paying recordation and transfer taxes. The five-year period for the Lower Income Home Ownership Tax Abatement begins on October 1, after your deed has been recorded and you have previously applied for the abatement. To qualify, you must meet the following conditions:

  • The property must be owner-occupied;
  • The owner must meet the income level requirement; and
  • The property must be less than $356,000 in value

If you qualify, submit a Lower Income/Shared Equity Home Ownership Exemption Application and Claim for Exemption from Real Property Recordation and Transfer Tax when you record your deed. These forms can be found in the Recorder of Deeds Forms Center.

For more information, call the Recorder of Deeds at (202) 727-5374.

Lower Income, Long-Term Homeowners Tax Credit

The Lower Income, Long-Term Homeowners Credit was passed by the DC Council to ease the effect of rising assessments and taxes on low-income residents who have lived in their homes seven consecutive years or more.

The current requirements for receiving the credit are:

You must have owned and occupied the property as your principal residence for at least the last seven (7) consecutive years;

  • The property must be receiving the Homestead Deduction;
  • The total household income of all household members of your residence must not exceed the Household Income Limit Table listed in Section D on the Schedule L; and
  • Your application must be filed by December 31 of each year.

Interested homeowners should call (202) 727-4TAX (727-4829) for more information.

Metropolitan Police Housing Assistance Program

DC Metropolitan Police Department officers who are first-time homeowners and live in their homes may be eligible for a sliding-scale real property tax credit. To apply, please call Housing Counseling Services, Inc. at (202) 667-7006

Property Tax Deferral

If your total household Adjusted Gross Income (AGI) is $50,000 or less, you may qualify for the low-income or low-income senior citizen property tax deferral. This program allows you to defer payment of increases in your property tax, or (if you are a senior citizen with household AGI of $50,000 or less) to defer your entire annual tax bill.

If you have lived in a Class 1 property for a year or more, and your tax is more than 10% higher than the previous year's tax, you may defer payment on the amount over the 10%.

To be eligible for the property tax deferral program, you must file an application and meet the following conditions:

  • You must have owned your home for at least 1 year before the application date;
  • You must have occupied the home for the 12-month period immediately before the application date;
  • You must currently occupy the property;
  • The current year's tax must be more than 10% higher than the previous year's tax;
  • The total of all taxes deferred, plus annual interest of 8% accrued on the deferrals, must not exceed 25% of the property's assessment for the real property tax year in which the deferrals are provided.

You must file an application by March 31 to defer the first-half tax or by September 15 to defer the second-half tax.

For further information about this program, see the Tax Deferral for Low-Income and Low-Income Senior Property Owners Application by visiting Real Property Tax Forms, or call the Customer Service Center at (202) 727-4TAX (727-4829).

Real Property Tax Exemption

 

 

Resale Restricted Properties

Senior Citizen or Disabled Property Owner Tax Relief

Trash Credit