loading...

The 5 Things To Know About DC Property Taxes

by UrbanTurf Staff

image

With all the news surrounding property taxes over the past few weeks, UrbanTurf wanted to put together a quick primer on the topic. As the widely-read Washington Post report makes clear, failing to pay your property taxes can result in consequences as dire as losing your home. While Mayor Gray has initiated a few programs to assist those who are delinquent, we wanted to outline a few things that will help navigate the process.

  1. Usable and occupied residential properties in DC are taxed at a rate of $0.85 per $100 of the assessed value (commercial, vacant and blighted properties are taxed at different rates.) An assessor determines the current market value of homes in the District, and property taxes may rise and fall based on the determined valuation.
  2. These days, if you take out a mortgage to buy a home, your property taxes are usually baked into the monthly payments. In these cases, your lender will divert a portion of your monthly payment to cover your tax bill. It is worthwhile, nonetheless, to check and make sure that if your monthly mortgage payments include property tax payments, your lender is indeed paying off your taxes.

    While your principal will be constant throughout the duration of a loan, your tax burden may vary slightly, depending on the assessed value of your home. So, some years you may have to pay more, others less.
  3. If you bought your home in cash, did not need to take out a loan or have paid off your home, you will receive a separate property tax bill from the city. In DC, you must pay property taxes twice a year, on March 31st and September 15th.

    You can pay your real property tax bill online or by mail. Instructions on how to do that can be found here.
  4. DC’s Homestead Exemption can save owner-occupants a considerable amount of money. The exemption will deduct $69,100 from your property’s assessed value when calculating the amount of property tax you must pay. To be eligible, the property must be your primary residence.

    There is another facet of the policy. For homeowners over the age of 64, the Homestead Exemption is even more valuable: senior citizens with an adjusted gross household income of less than $100,000 can have their property taxes reduced by 50 percent. This is particularly pertinent to those living in rapidly changing areas, where the property values and corresponding taxes may be significantly higher than they were when the older folks moved in.

    Interested parties must apply for the exemption through the District’s Office of Tax and Revenue. You can follow links to the application here. If at some point the owner becomes ineligible, they must cancel the exemption or face monetary penalties.
  5. If a homeowner fails to pay their property taxes, penalties can quickly pile up. The penalty is 10 percent of your tax and the interest is 1.5 percent of the tax for each full or partial month your payment is late. Every year, the city sells off a number of their tax debts to parties who can then charge even more in fees and interest and eventually foreclose on the home. As the Post story outlined, when this happens, owners sometimes find themselves losing their homes to very small original debts.

    Mayor Gray’s newest initiative is aimed at helping those who have fallen behind on their debts to navigate the system and set up payment programs. A new District employee, the Real Property Tax Ombudsman, will be the person to call when you need assistance with your property taxes.

Similar Posts:

* First-Timer Primer: What To Do After Buying an Illegally Rented Property
* First-Timer Primer: What Is the Right of First Refusal?
* First-Timer Primer: What is a Rent Back?
* First-Timer Primer: Is This Condo Building Financially Healthy?
* First-Time Primer: Obtaining a Basic Business License For Your Rental
* First-Timer Primer: A Condo Fee Tutorial
* First-Timer Primer: Interest Rates and Mortgage Points
* First Timer Primer: The Splitting the Rent Formula
* First Timer Primer: Tax Relief for DC Homeowners
* First Timer Primer: How Do Mortgage Payments Work?
* First Timer Primer: How Much Cash Do You Need to Buy a House?
* First-Timer Primer: The Mortgage Pre-Approval Process
* How a $100 Mistake Can Sink Your Credit Score

This article originally published at http://dc.urbanturf.com/articles/blog/the_top_five_things_to_know_about_property_taxes/7563

6 Comments

  1. C said at 1:16 pm on Tuesday September 17, 2013:

    Dear Urban Turf, are you sure about point #2 in this primer?  I’ve not seen situations where your taxes are tied up in your monthly mortgage?  I’ve only seen monthly mortgage payments and then the city delivers (twice per year) tax bills, as you stated.  Is there a way to set up your monthly mortgage to cover the taxes?  I thought mortgages were to a separate party and not where local taxes would go.  Could you expand on this point or clarify this point, please.  If you are talking about cooperatives or condos, maybe then the point #2 is correct but the article makes it sound as if it is applicable to any type of home and I haven’t seen this to be the case. 

    Thanks

  1. Rob said at 1:38 pm on Tuesday September 17, 2013:

    I believe they are referring to the fact that you mortgage company will collect (in one monthly payment) your PITI - principle, interest, taxes and insurance.  The money for taxes and insurance are escrowed and then they will pay, on your behalf your insurance company bi-annually and your property taxes bi-annually as well.  I always thought this was the standard.

  1. The Editors said at 1:39 pm on Tuesday September 17, 2013:

    C,

    Yes. Most lenders these days have borrowers pay into an escrow account, as part of their monthly payment, which covers property taxes and homeowners insurance. When property taxes are due, the lender pays them for you out of this account.

    Hope this helps.

    The Editors

  1. C said at 2:03 pm on Tuesday September 17, 2013:

    Thanks Rob and Urban Turf editors, I learned something.  I thought that arrangement was only for the month for when someone buys a new property and what goes into escrow is used to pay the various amounts owed to different places.  I did not think it was an ongoing thing.

  1. whoa_now said at 3:23 pm on Tuesday September 17, 2013:

    Is there a limit to how much your property taxes can go up? and or pay? If for instance my property taxes went up 150K over the course of one year…is their a limit on what I have to pay? otherwise its an additional 1200 dollars.

    oddly enough my code was poor94

  1. Mike said at 8:21 am on Wednesday September 18, 2013:

    To whoa_now: I suspect you meant if your “property ‘assessment’ went up by 150k”... Property tax increases are capped at 10%.  For example, if you paid $2500 in taxes the previous assessment period, your taxes can’t increase by more than $250 regardless how high your property is assessed.  That 10% cap is applied anew annually to help control annual tax increases any one person will experience.

Join the discussion

UrbanTurf now requires registration in order to post comments. Register here, or login below if you are already registered.

Click here if you forgot your password.



DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Ballston
Looking to Give People A Reason to Stay Past 6pm
Clarendon
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Rosslyn
Hitting Its Growth Spurt
Shirlington
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
Huntington
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
Parkfairfax
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »

Maryland

Profiles of 14 neighborhoods in suburban Maryland

Annapolis
Small-Town Living in the State Capital
Bethesda
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
Potomac
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
Wheaton
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Hyattsville
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Bloomingdale
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
Brightwood
DC’s Northern Neighborhood on the Cusp
Burleith
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
Crestwood
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Fort Totten
Five Years Could Make a Big Difference
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
Georgetown
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
Kalorama
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
Palisades
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Petworth
Getting a Vibrancy of Its Own
Shaw
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Takoma
Not To Be Confused With Takoma Park
Tenleytown
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

Brookland
New Development Could Shake Up Pastoral Peace
Deanwood
A Little Bit of Country Just Inside the District’s Borders
Eckington
Not to Be Confused With Bloomingdale
H Street
A Place To Party, and To Settle Down
Langdon
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
NoMa
Evolving from a Brand to a Neighborhood
Rosedale
Ripe for Investment Right About Now
Trinidad
The Difference 5 Years Makes
Woodridge
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Hillcrest
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »

Upcoming Seminars ▾