loading...

The 5 Things To Know About DC Property Taxes

by UrbanTurf Staff

The 5 Things To Know About DC Property Taxes: Figure 1

Today, UrbanTurf is re-running its primer on property taxes which outlines a few things that will help area homeowners in the city 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 with cash, did not need to take out a loan or have paid off your house in full, 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 $73,350 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 $130,500 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.

Vincent Gray launched an initiative in 2013 aimed at helping those who have fallen behind on their debts to navigate the system and set up payment programs. The Real Property Tax Ombudsman is now the person to call when you need assistance with your property taxes.

See other articles related to: property taxes, dclofts, dc property taxes

This article originally published at https://dc.urbanturf.com/articles/blog/the_5_things_to_know_about_dc_property_taxes/8356

5 Comments

  1. Randy A Weiss said at 7:48 pm on Monday April 14, 2014:
    Bad timing. While Tax Day is tomorrow, it is INCOME TAX DAY! The first half of DC Real Estate Taxes was due on 9/30/13 and the second half was due on 3/31/2014 (in arrears). Also, you have missed two very important tax impounds. First, the vacant/blighted property under The Fiscal Year 2011 Budget Support Act of 2010. Second, you do not mention BID taxes!
  1. Eric said at 7:53 pm on Monday April 14, 2014:
    Thanks for this guide. Question: What is the maximum that your property taxes can increase in a given year? I have heard 10% but haven't found documentation anywhere.
  1. Kes said at 8:20 pm on Monday April 14, 2014:
    The cap on your property tax increase is 10% per year, regardless of your property assessment. From DC's Office of Tax Revenue: "The housing market in the District of Columbia has caused a surge in the assessed value of residential real property. In an effort to limit the increase of real property taxes for homeowners, eligible homeowners will be provided an Assessment Cap Credit. The Assessment Cap currently provides that a property may not be taxed on more than a 10 percent increase in the property’s assessed value each year. This credit does not reduce the assessed value of your property on the tax roll or the assessment notice, but it will appear as an automatic credit against your real property tax bill." More information on DC tax credits can be found here: http://otr.cfo.dc.gov/page/other-credits-and-deductions
  1. Tax bill said at 8:38 pm on Monday April 14, 2014:
    This is a good article. You over-state your point in #3, where you imply that only those with no mortgage will pay their own tax bill. For most lenders, escrow of taxes and insurance is only required for down payments less than 20%. If you put down 20% or more, you can decide whether or not you want to escrow.
  1. Mike said at 10:01 pm on Monday April 14, 2014:
    The new value for the Homestead Exemption is $70,200 (item 4): http://otr.cfo.dc.gov/node/409562 Co-op owners also participate in the Exemption via their corporate pass-through status.

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!