Real estate agents and homebuyers often ask us about DC Homestead Deduction, a program that offers tax relief to District homeowners. Who qualifies and what are the benefits?
As a complimentary service, Federal Title will complete and file the application as part of the closing services we provide.
- An owner of a residential (1-5 units) property who occupies the property as a principal residence.
- Must be a resident of the District of Columbia. Proof of residence may include obtaining a DC driver’s license, registering to vote, registering a vehicle, and filing of DC tax returns.
- Generally, must be a US Citizen. Some G-4 visa holders may qualify as residents by providing a letter from their international organization employer.
View More Information About Qualifying Here
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 $72,450. At a tax rate of $0.85 per $100 of assessed value, that’s a annual savings of $615.82. 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.
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 31 August 2017
Here's Information on Qualifying
While we are all pleased with the DC City Council’s decision to provide some relief for first-time homebuyers, this enactment is not without its complications and nuances. Qualifying is not as simple as Maryland’s first-time homebuyer exemption; whereby, each homebuyer must simply be a first-time homebuyer of a principal residence to qualify. No, this enactment also imposes a few additional hurdles, including purchase price limitations and limits on household income.
In general, the recordation tax will be reduced to .725% if:
- Each grantee (i.e., homebuyer taking title) has never owned a principal residence in the District.
- The property is improved residential property and qualifies for the DC Homestead Deduction. Note: Be careful here. Qualifying for the DC Homestead Deduction is not simply a statement provided by the homebuyer(s) that they will occupy the property as a principal residence – read more.
- The purchase price can't exceed $625,000.00. Note: This purchase price threshold may be subject to an annual adjustment.
- Total Household Income can't exceed defined thresholds - view here.
- As a further complication, since the enactment only applies to real property that qualifies for the homestead deduction, this means that the reduction would not apply to the value of unimproved lots (e.g., condo parking spaces or out-lots). For transactions involving unimproved lots, this may require sales contracts to specify an apportioned value (not simply total purchase price) for both the homestead deduction qualifying lot, as well as, the non-qualifying lot. In other words, the full recordation tax of either 1.1% or 1.4% would be assessed on the value of the lot that does not qualify for the homestead deduction. Stay tuned for our future communication on this little wrinkle.
Please View the Application Here
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- Filing an online claim for maintenance or repair from your mobile, tablet, or computer.
- Payment transactions are managed online so processing of payments with Super and the service provider is effortless.
- Their online database records all services for the home, so should you decide to sell, you can show home improvement efforts collected in one record, to share with a potential buyer.
- Super manages the scheduling of all appointments with you and the service provider so there is zero hassle with coordination.
- Customers can track the service provider’s estimated time of arrival on Super’s website portal via google maps – they’ll also call 30 minutes ahead of the appointment to ensure you don’t miss each other.
- Super offers a concierge service that can help with other home maintenance services such as window cleaning, carpet cleaning, and or pool maintenance, to name a few.
- Super has a Service Rewards TM referral program that earns subscribers $100 in rewards for each family member and or friend that signs up with Super. Service Rewards™ can be applied to the concierge cost of any service coordinated by Super, that isn’t already covered as part of their subscription plan.
Super is essential for: home buyers, sellers, landlords, or even investors because they make it easier for the customer when appliances break within the home. This home warranty coverage allows for the customer to enjoy the true value of a fully-serviced, professional, and user-friendly home warranty system that fits ANY size budget, with their 3 different plan options. So why not let Super be the Superintendent of your home today. Receive a 10 percent discount with the code FEDERALTITLE when purchasing a subscription now.
Join us for an important luncheon to discuss security within the real estate industry.
Topics to include:
- Cybersecurity/Wire Fraud - Protect Your Clients
- Personal Security - Protect Your Self When Showing Homes
- Home Security - Protect Your Home With a Warranty
Expert speakers from the Metropolitan Police department's cybercrime and security unit, as well as Super Home warranty.
When: Monday, October 2, 2017
Where: Maggiano’s Little Italy, Washington, D.C.
Time: 12:00 p.m. - 2:30 p.m.
Thank you to our sponsors!
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