First-time homebuyers in the District of Columbia can look forward to a lower transfer tax rate at the closing table starting this fall, provided the City Council votes in favor of the "First-time Homebuyer Tax Benefit Amendment of 2015" as it is expected to do.
A new transfer tax rate of 0.725% for first-time homebuyers would go into effect on Sept. 30, 2016, according to the bill that is sponsored by councilmembers Jack Evans (D-Ward 2), David Grosso (I-At Large) and Anita Bonds (D-At Large).
To obtain the benefit, a signed affidavit must be provided at closing essentially stating that the buyer is a first-time homebuyer and the unit will be his or her principal residence.
The current transfer tax rate for homebuyers varies depending on purchase price from 1.1% for purchases of $399,999 or below to 1.45% for purchases of $400,000 or more.
This amendment would not be the District's first attempt at offering tax relief to would-be homebuyers. Up until the 2012 tax year, qualifying buyers were eligible for a $5,000 tax credit when they filed their taxes in April. That program had been in existence since 1997 before it was canceled.
Another popular tax program that's still going strong in District is the tax abatement program.
The First-time Homebuyer Tax Benefit Amendment will take effect following approval by Mayor Muriel Bowser and is subject to a 30-day congressional review.
If you work with foreign nationals in your real estate business, be advised that the FIRPTA withholding rate on home sales exceeding $1 million will increase to 15% on February 16.
Also known as the Foreign Investment in Real Estate Property Tax Act, FIRPTA requires foreign persons to pay U.S. income tax on gains made from the sale of real estate in the United States. Home sales that do not exceed the $1 million dollar threshold are subject to a 10% withholding.
There is an exception to the FIRPTA withholding rule. If the sales price is below $300,000 AND the new buyer intends to use the property as a principal residence, then the home sale is not subject to FIRPTA withholding.
The duty of collecting the FIRPTA tax, owed by a foreign national seller, is imposed on the U.S. national buyer The amount that must be withheld can be lowered pursuant to the seller obtaining a withholding certificate from the IRS prior to closing.
In most instances, the settlement agent will actually collect the withholding from the foreign national seller and remit the funds to the IRS on behalf of the buyer. However, the buyer is held legally responsible for the proper withholding and, under the law, the buyer could be liable for any additional withholding tax, penalty and interest if ever challenged by the IRS.
To help you determine when FIRPTA withholding is required, and the rate to withhold, we created a simple flowchart that contains four easy questions. You can view it on our website and download a copy to share with your clients and colleagues.
We are pleased to announce a second Federal Title office located at 1803 14th Street, NW is now open for business.
Our new location is two blocks south of U Street and three blocks north of Logan Circle in the heart of the burgeoning 14th Street Corridor.
Use our main phone number (202) 362-1500 to get in touch with that office or send your general inquiries to firstname.lastname@example.org. Be sure and bookmark our Contact Page to keep our information for both locations at the ready.
Stephanie Dudley will lead our team at our U Street / Logan Circle location as managing attorney. Stephanie has been with our company for about three years now. She received her Juris Doctor from The Catholic University of America in 2005 and has been working in the title industry as an attorney and settlement processor ever since.
Attorney Chris David and settlement coordinator Shantae Holland have made the move with Stephanie from headquarters in Friendship Heights to the new location.
Next time you're in the U Street or Logan Circle neighborhoods, look for our logo on a blue awning, and be sure to drop in and say hello. We look forward to serving you from a location that's even closer to the neighborhoods a growing number of homebuyers are calling home.
This week we're looking at a 4-bedroom, 4.5-bathroom attached row house in the Colonial style with a fully finished basement that can be used as an in-law suite or a rental to help offset the mortgage. It's near the Naval Observatory in Glover Park, and it's listed at $975,000.
This house features two massive decks, a fantastic kitchen with pantry and a beautiful exposed brick wall in the entry way. It includes two parking spaces, and there's a Whole Foods and Starbucks nearby.
Click here for more photos.
Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $$223,117.96. Monthly payments will then be around $4,219.40 per month.
For a complete picture of the cash to close on any property in the D.C. metro area, including the seller's side of the transaction, try the Close It™ Web app or download the free Close It™ iOS app.
We’re venturing downtown this week for a glimpse at a 1-bedroom, 1-bathroom condo with floor-to-ceiling windows that offer amazing views from their perch on the 12th floor. It’s listed at $440,000.
This unbeatable location is in close proximity to the Chinatown, Union Station, Judiciary Square and Convention Center Metro stops. The building has garage parking. And the unit itself offers wood floors and granite countertops as well as an in-unit washer-dryer.
Assuming a homebuyer puts down 20 percent on a conventional loan, her cash to close number will be approximately $101,039.80. Monthly payments will then be around $2,354.13 per month, including the HOA fee. For a complete picture of the cash to close on any property in the D.C. metro area, including the seller's side of the transaction, try the Close It™ Web app or download the free Close It™ iOS app.