How to qualify for DC Homestead Deduction

Real estate agents and homebuyers often ask us about DC Homestead Deduction, a program that offers tax relief to District homeowners. The potential savings for a homebuyer over the course of a year currently hovers around $600.

This article will help you determine if you qualify for the program. A settlement company like Federal Title can help you complete the application so you can take advantage of savings as soon as possible.

Read the latest news on the DC Homestead Deduction.

What is the DC Homestead Deduction?

Also known as the Homestead Exemption, it's a real estate tax benefit provided to residents of the District of Columbia who own and occupy their residential property.

View the Homestead Deduction application.

What are the specific benefits?

There are two main benefits to obtaining the Homestead Deduction. First, for the purpose of computing your yearly tax liability, it will reduce your real property’s assessed value by $67,500 $71,700. At a tax rate of $0.85 per $100 of assessed value, that’s a annual savings of $573.75 $609.45. Second, you are entitled to an assessment cap such that your property may not be taxed on more than a 10% increase in the property’s assessed value each year.

How do I know if I qualify?

You qualify for Homestead Exemption if:

  • You occupy or intend to occupy the property shortly after closing
  • The property contains no more than five dwelling units (including the unit occupied by you)
  • The property is your principal residence (domicile)

When does the Homestead Deduction take effect?

If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead Deduction 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).

When should I apply for the benefit?

You should apply at the time of your closing or shortly thereafter. Federal Title can help you complete your application at the time of closing and, as a complimentary service, file the application on your behalf.

What if I have a Homestead Deduction on another property?

You cannot maintain a Homestead Deduction on a non-owner occupied property. If you no longer occupy a property that currently receives the Homestead Deduction benefit, you must notify the agency when eligibility ceases. View the Cancellation of Homestead Benefit form.

Information deemed reliable but not guaranteed. | Updated 16 May 2016
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