DC First Time Buyer | Recordation Tax Reduction

That big line item on your closing statement can be reduced if you're a first-time DC homebuyer who qualifies.

What is DC Recordation Tax?

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.

How Much Is It?

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.

What's The First Time Homebuyer Discount?

For deeds recorded on/after October 1st 2017, the recordation tax rate for a first-time District of Columbia homebuyer purchasing eligible property will 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 unit), 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 (there is no transfer tax). An 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.

How Do I Qualify?

Qualifications

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.

More Information

Disclaimer: Determine eligibility and program specifics at https://otr.cfo.dc.gov/publication/reduced-recordation-tax-rate-first-time-homebuyers  This article is published for informational purposes only. Updates and revisions to this program may exist outside of this venue.

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The Isaacs Team