Close It™ House of the Week: Cozy condo in prime Dupont Circle location

This week we’re checking out a cozy condo in Northwest that’s ideal for a carless lifestyle. Just blocks from the Dupont Circle Metro stop, it’s also a short walk to Adams Morgan, the U Street Corridor and Logan Circle. List price is $359,000.

Located in a building that was constructed in 1916 and known today as Bristol Condos, this 1BR / 1 BA unit features high ceilings and period moldings. It also features hardwood floors in the living and dining areas and a small rear balcony. In addition to two large closets, the building includes bicycle storage and a secure storage room.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $81,808.26. Monthly payments will then be around $1,348.34, including the HOA fee. For a complete picture of the cash to close, including the seller’s side of a transaction like this, try the Web version of Close It™ or download the free Close It™ iOS app.

Close It!™ House of the Week: Contemporary condo near U Street Corridor

We’re headed to the U Street Corridor to check out this week’s House of the Week, a sun-filled 977-square-foot front-facing condo that has 2 bedrooms and 2 bathrooms and an ideal split floor plan configuration. It’s listed at $739,000.

It’s a corner unit located on the third floor of the contemporary Lima Condos project, which delivered in 2013. The gourmet kitchen features quartz countertops, espresso-colored cabinetry, gas cooking and top-tier stainless steel appliances. In addition, this condo comes with garage parking while the building comes with a roof terrace. The location is just blocks to Metro as well as a number of interesting shops and restaurants along U and 14th streets.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $168,169.37. Monthly payments will then be around $3,523.56, including the HOA fee. For a complete picture of the cash to close, including the seller’s side of a transaction like this, try the Web version of Close It™ or download the free Close It™ iOS app.

MoCo Council to consider increase to recordation taxes

The cost of buying a home in Montgomery County may soon increase, as County Council President Nancy Floreen has proposed an increase in the recordation taxes paid at real estate closings as a way to finance school construction.

The measure is projected to raise $185 million in revenues with $155 million earmarked for school construction, and a hearing on the bill is scheduled for May 10.

The current recordation tax in Montgomery County is $6.90 per $1,000 for the first $500,000 of purchase price. The recordation tax rate increases to $10 per $1,000 for anything over the $500,000 mark. Buyers and sellers customarily split the recordation tax 50/50.

For example, a purchase price of $400,000 at the current recordation tax rate would amount to $2,415 split between the buyer and seller. On a home sold for $600,000 the recordation tax would amount to $4,105 split between the buyer and seller.

Real estate agents are opposed to the tax increase saying it will hurt first-time homebuyers in particular and may have a negative impact on the local real estate market overall. Proponents of the legislation say it is necessary to fund school expansions in the growing county.

Montgomery County’s population has increased by more than 100,000 residents over the last 10 years and exceeds 1 million residents, making it the most populated county in Maryland.

Check back for updates on this legislation.

Close It!™ House of the Week: Cool condo in hot Eckington neighborhood

We’re venturing over to the Northeast quadrant to check out a super cute condo that just came on the market in the hot Eckington neighborhood. It’s newly renovated with a private patio and comes with parking. It’s got 2 bedrooms that each have an en-suite bathroom. List price is $429,000.

The unit features hardwood floors as well as granite countertops and stainless steel appliances. Just eight minutes from the Rhode Island Metro stop, this condo is in close proximity to a Rhode Island Row, a shopping area that has already seen a huge transformation. Plans for further development are on the horizon. In the opposite direction is the up-and-coming Bloomingdale neighborhood, which has seen a number of local restaurants open in recent years.

Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $95,050.86. Monthly payments will then be around $1,988.72, including the HOA fee. For a complete picture of the cash to close, including the seller’s side of a transaction like this, try the Web version of Close It™ or download the free Close It™ iOS app.

What’s the status on B21-0417, aka The First-time Homebuyer Tax Benefit Amendment Act of 2015?

Legislation that would offer tax relief for District residents buying DC real estate is currently under committee review and awaiting scheduling for a mark-up, a spokeswoman for the Council's Committee on Finance and Revenue said.

Known as the First-time Homebuyer Tax Benefit Amendment Act of 2015 (B21-0417), the bill would create a new transfer tax rate of 0.725% for homebuyers who have never purchased a house, condo or share in a cooperative unit in the District. It would go into effect Sept. 30, 2016.

During mark-up, which is a vote in the Committee to send the bill before the whole Council, the Committee will have an opportunity to amend the bill (or not) and will also have a chance to review a financial impact statement to analyze costs and revenues of the proposed legislation.

If the bill passes mark-up, it will go to Mayor Muriel Bowser for a signature before going to Congress for review and passive approval. If it fails mark-up, the bill will get kicked to the Committee of the Whole and added to the agenda for the next legislative meeting.

Impact on low- to moderate-income residents a concern

The Council held a public hearing about the bill on February 10 of this year, which is when Settlement Observer picked up on the story. Then on February 24 a representative from the DC Fiscal Policy Institute testified before the Committee about concerns regarding a lack of income restrictions and the impact the tax cut would have on the city’s Housing Production Trust Fund.

“Rather than provide a new tax benefit for all first-time homebuyers, DCFPI recommends that policymakers review the city’s current deed tax assistance to low- and moderate-income homebuyers and make adjustments if they appear warranted,” said DCFPI Housing Policy Associate Claire Zippel in her testimony.

The bill was introduced last October by councilmembers Jack Evans (D-Ward 2), David Grosso (I-At Large) and Anita Bonds (D-At Large).

Grosso acknowledged concerns regarding the economic impact of lowering the transfer tax rate across the board and, in particular, how such a deduction would affect the Trust Fund.

“I am committed to working with my colleagues to ensure that the [Trust Fund] receives annual commitments so that it is not dependent on yearly fluctuations in recordation tax revenues,” Grosso said in a statement.

Mayor Bowser’s budget proposal last year included $100 million for the Trust Fund in fiscal year 2016, according to the website of the Coalition for Nonprofit Housing & Economic Development. The Trust Fund is administered by the DC Department of Housing and Community Development with support from the Coalition.

The Trust Fund “enables non-profit housing providers, mission-driven for-profit developers and renters wishing to exercise their Tenant Opportunity to Purchase rights to improve and develop affordable housing in all eight wards,” according to the Coalition’s website.

Since its inception in 2002, The Trust Fund has produced or preserved more than 8,000 affordable homes with upward of 2,000 more in the pipeline, according to the Coalition’s website. In addition the Trust Fund has created an estimated 10,000 short-term and permanent jobs and has helped more than 18,000 DC residents.

The District's homebuying taxes significantly higher than Maryland or Virginia, about 50% higher on average

Current DC transfer and recordation taxes are on average 50% higher than neighboring Maryland and Virginia, Grosso said in a statement, which was the impetus for introducing a bill that would lower the tax burden for homebuyers purchasing for the first time in the District.

Transfer tax rates for District properties vary depending on the purchase price, from 1.1% for purchases $399,999 and below to 1.45% for purchases of $400,000 or more. The tax payment is traditionally paid by both the buyer and seller.

The DC tax abatement program offers relief for some, but homebuyers must satisfy income, purchase price and other restrictions and provide documentation to qualify.

Tax abatement waives the recordation tax obligation for low- to moderate-income first-time homebuyers while also crediting the seller’s portion of the tax to the homebuyer, resulting in a 2.2% swing in favor of the homebuyer. In addition, a qualifying homebuyer is exempt from paying property taxes for the first five years of ownership, but again some restrictions apply.

“If policymakers are concerned that the current deed tax assistance programs are inadequate, the District should look to modify existing programs while keeping a focus on low- and moderate-income families, rather than adopt another tax break that has no income targeting,” Zippel, the housing policy associate, said in her testimony.

We will continue to monitor the story, and readers can also follow along on the Council's website.

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