DC Recordation Tax Reduction

The DC First Time Buyer Recordation Tax Reduction program lowers a huge line item on qualified DC home buyers’ settlement statements.

DC first time homebuyer recordation tax cut

What Is Recordation Tax?

It’s a tax on the recording of all deeds to real estate in the District of Columbia. The tax basis is the value of consideration given for the property. Where there is no consideration or where the consideration is nominal, the tax is imposed on the basis of the fair market value of the property. Currently, recordation tax on a deed of trust is 1.45% of the loan amount.

How Much Is It?

  • Transactions $399,999 and less: 1.1% of the purchase price
  • Transactions $400,000 up: 1.45% of the purchase price
  • First Time Homebuyer Program: Transactions $647,000 and less may qualify for reduced recordation tax of 0.725%

The DC First Time Homebuyer Recordation Tax Cut

The recordation tax rate for a “first-time District homebuyer” purchasing “eligible property” may be reduced.

  • For houses and condominium units, the recordation tax rate is 0.725%;
  • For transfers of economic interests in a housing cooperative unit (co-op), the recordation tax rate is reduced from 2.2% to 1.825% for units under $400,000, and from 2.9% to 2.175% for units $400,000 or greater.

Application for the reduced rate must be made at the time the deed is offered for recordation. The reduced rate cannot be applied for after the deed is recorded (retroactively).

Buyers should advise their real estate agent as to whether or not they qualify for the program when the contract is written so the appropriate selection on the Jurisdictional Addendum may be made

What Does The Seller Pay?

DC Sellers pay a Deed Transfer Tax. Each transfer of real property at the time the deed is submitted for recordation. The tax is based upon the consideration paid for the transfer. Where there is no consideration or where the amount is nominal, the basis of the transfer tax is the fair market value of the property conveyed.

Current Tax Rate:
1.1 % of consideration or fair market value for residential property transfers less than $400,000 and 1.45% of consideration or fair market value on the entire amount, if transfer is greater than $400,000.

For residential properties under $400,000, the rate is 1.1% of consideration or fair market value.

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Bullet Points

  • Check your qualification
  • Let your agent know about eligibility
  • Apply as required, when required

Michael V

I went to The Isaacs Team after working with another realtor that wasn’t really delivering the level of detail on potential homes that I was seeking. Susan and Alex not only met, but exceeded my expectations in the level of knowledge I sought. Their level of professionalism has secured them a client in me, for all future property purchases.

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