Last Friday, a bill was enacted in the District to offer first-time homebuyers a measure of tax relief.
The First-time Homebuyer Tax Benefit Amendment Act of 2016 amends the DC Deed Recordation Tax Act to reduce the recordation tax rate for first-time homebuyers in the District for a period of four years.
First-time homebuyers who have a household income that does not exceed 180 percent of area median income would pay a tax rate of 0.725 percent. The program is expected to run through December 31, 2021, and the Mayor’s office will report to the DC Council on the benefits of issuing the reduced rate.
A recordation tax is the fee that a jurisdiction collects as part of recording a real estate transaction in the land records. Typical DC recordation tax rates are 1.1 percent for homes sold for $399,999 or less and 1.45 percent for homes sold for $400,000 and above.
Whether and when the bill gets implemented will depend on the outcome of current budget negotiations, as it cannot be taken advantage of without a funding appropriation. Despite signing the bill into law in February, Mayor Bowser has not included any appropriations for the benefit in her budget proposal; the council is expected to release their counter-proposal some time in the next month.
The bill was introduced in October 2015 by Councilmembers Anita Bond, Jack Evans and David Grosso; it was enacted as law on April 7th after the mandatory congressional review period.
This article originally published at https://dc.urbanturf.com/articles/blog/first-time_homebuyer_tax_relief_in_the_district/12443.
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