Councilmember David Grosso is proposing another source of revenue generation for DC: seven-figure residential properties.
At a budget work session on Wednesday, Grosso previewed a "mansion tax" bill he is planning to introduce next week, citing the need for additional investments in housing, schools, homelessness and other long-standing issues that effect long-term residents. The increased property tax would affect owner-occupied houses valued at over $1 million.
WAMU's Tom Sherwood tweeted that the tax premium would be applied to the assessed value above $1 million rather than for the full value of the property, and that there would be a different, higher tax premium tier for homes valued at over $2 million. Although no fiscal impact statement has been completed, Grosso estimated that the provision could raise over $50 million in annual revenue.
In introducing the concept, Grosso mentioned that there would be less need for these taxes had the city been more proactive about making certain investments when the city first became more prosperous.
"It would make sense for us not to think about raising taxes for revenue generation, if we had invested in things in the city that mattered to everyday people at a faster rate," Grosso said. "It's about redistributing the wealth, and I think that we can get a lot more recurring dollars in our budget to invest in the priorities that we should be investing in in the District."
Ward 2 Councilmember Jack Evans responded that the city has "invested enormous amounts of money since the bad old days when we didn't have any money" in the aforementioned areas, and that the question should be whether they are spending the money wisely. At-Large Councilmember Robert White stated that while the idea might have merit, it may be too late in the budget process to introduce a new tax. White also noted that there are some "house-poor" homeowners who purchased in certain neighborhoods for the schools, as well as long-time homeowners whose property may be valued high solely because of changing neighborhood valuations, and that the tax wouldn't be equitable if it doesn't capture renters of luxury properties with ample disposable income.
Grosso's legislative director, Katrina Forrest, is currently writing the bill, which could be introduced next week. UrbanTurf will update this article when more details are available.
This article originally published at http://dc.urbanturf.com/articles/blog/dc-councilmember-grosso-proposing-a-mansion-tax/15375
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