We've had a lot of questions about TOPA lately. Some of them listed below.
The new TOPA statute for a single-family home, condominium unit and single-family home with an appurtenant unit is finally in place.
As a homebuyer, it is important to be aware of programs you can benefit from in order to reduce the overall cost of the process of buying a place to live.
The DC Tax Abatement program is one such opportunity that a homebuyer can and should take advantage of.
However, there are qualifications that a homebuyer must meet in order to become eligible for this program, and it is important to stay informed on what these are.
Did you know TOPA was amended as of July 3?
The DC Department of Housing and Community Development will hold a workshop to provide an overview of the newly enacted Single-Family Home Exemption Amendment Act of 2018 (Bill 22-0315, Act 22-339). today from 1 to 3 pm.
For those who cannot attend in person, the DHCD Facebook page will also broadcast the workshop live.
The workshop will cover a variety of topics including:
- Types of single family properties that are exempt
- Criteria that an elderly or disabled tenant must meet to still have a limited opportunity to purchase
- Notice and documentation requirements
If you wish to attend today's workshop in person, you must register. The workshop is free and will take place from 1 to 3 p.m. at One Judiciary Square, located at 441 4th Street NW, Old Council Chamber Room, Washington, DC 20002.
In the process of purchasing a property, it is hard to keep track of all of the elements involved.
Such elements can even include things that could be beneficial to the homebuyer. Therefore, we here at Federal Title do our best to keep homebuyers informed about their options in the homebuying process, like the DC Homestead Deduction, so that they can make the best decisions.
What is there to gain?
The DC Homestead Deduction provides valuable savings when it comes to what amount of the assessed value for your property is taxable.
Currently, the property tax rate is $0.85 per $100 in DC which means that .0085 of your property’s assessed value must be paid as a tax. However, if you are eligible for the DC Homestead Deduction, your property’s assessed value is reduced by $73,350.
Therefore, because the amount the government can tax is less, the money you must pay for the real property tax is less. However, the value by which your property is reduced changes annually and so it is important to stay up to date on that number.
In order to be eligible for the DC Homestead Deduction, there are four qualifications a homebuyer must meet.
First, a Homestead Deduction application must be filled out and on file with the Office of Tax and Revenue (link for DC Homestead Deduction application: https://otr.cfo.dc.gov/node/1299251).
In addition, the property, which cannot include more than five dwelling units, must be the principal residence of the owner/applicant.
Principal residency can be determined by where you pay your taxes, where you vote, what address is on you driver’s license, etc.
Finally, you must be domiciled in DC which means that you have a DC government issued ID, you are registered to vote in DC, and you file DC Personal Income taxes.
If these conditions are met, then you are eligible for the DC Homestead Deduction.
When do you begin receiving the benefits of the DC Homestead Deduction?
When the DC Homestead Deduction goes into effect depends on when the application for it was filed. If an approved application was filed between October 1 and March 31, then the DC Homestead Deduction will go into effect for that entire tax year and every tax year after that.
If an approved application was filed between April 1 and September 30, then the property will receive half of the deduction amount and then the following years after that it will receive the full deduction.
When should you cancel your DC Homestead Deduction?
There are several instances in which you must cancel your DC Homestead Deduction.
It is important that you can recognize the situations so that you don’t fall victim to the District of Columbia’s Homestead Deduction Audit Program.
Essentially, if the property is no longer your principal residence then you must fill out a Cancellation of Homestead Benefit form.
This means that if you moved off the property and are renting it out you must fill out the form. If you purchased another property in DC and filed for a Homestead Deduction on the property then you must fill out the form.
Are you still eligible if you are only a co-owner of a property?
If you are only a co-owner of a property and the other owners will not be living with said property as their principal residence then you are still eligible for the DC Homestead Deduction.
All that is required is that you meet the three qualifications which are that you are a principal resident, your property only includes five or fewer dwelling units, and you are domiciled in DC.