Are you considering investing in real estate in Washington DC? If so, you may be eligible for some tax incentives. The District of Columbia offers several programs to help homeowners and first-time homebuyers. These programs can provide property tax relief, family home deductions, and other credits. The family home exemption is available to individual landlords who maintain the property as their primary residence.
However, properties owned by limited liability companies, corporations, or most trusts are not eligible. Active-duty military personnel can declare the District their home address by filing form DD 2058 with their military finance office. It's important to apply for these exemptions as soon as you're eligible. The District will not accept any retroactive requests for tax exemptions.
If you are no longer eligible for an exemption, you must submit a cancellation form within 30 days of the date the property is no longer eligible. Properties may become ineligible for several reasons, such as when a property is sold to an investor or the buyer is not domiciled in the District and is no longer eligible for the family home exemption. In an effort to limit the increase in real estate taxes for homeowners, eligible homeowners will receive an appraisal limit credit. Organizations that apply for exemption from DC real estate tax must own the real estate for which the application is submitted and meet the requirements of the Official Code of the District of Columbia, § 47-1002. Potentially deductible expenses include insurance, repair and general maintenance costs, real estate taxes, utilities, supplies, and more. The Maximum Appraisal Credit for Seniors generally states that real estate cannot be taxed with an increase of more than 2 percent in the taxable assessed value of your property on the tax list or on the valuation notice, but it will appear as an automatic credit on your real estate tax bill. Small retailers in the District of Columbia that operate a qualifying business and pay real estate taxes at a qualifying retail establishment may be eligible for a refundable credit on their commercial franchise tax return. DC Metropolitan Police Department officers who are first-time homeowners and live in their homes may be eligible for a variable-scale real estate tax credit.
In most cases, the points you pay for a loan to buy, build, or substantially improve your primary residence are deductible in full in the year you pay them. For more information on these tax relief and credit programs, contact our OTR Customer Service Center at (20) 727-4TAX (727-482). It's important to pay promptly if a bill is presented for unpaid taxes, penalties, and interest as a result of a tax audit of the property or of a senior citizen. Paying on time will prevent additional interest from accruing and can also prevent your property from being auctioned for tax sale. The District Tax and Revenue Office recommends that landlords cancel these exemptions right away when they are no longer eligible. If these exemptions are not immediately canceled, landlords will be responsible for poorly paid real estate taxes, penalties equivalent to 10 percent of delinquent tax, and interest accrued each month at 1.5 percent until paid in full. The District of Columbia Council approved a credit for low-income and long-term homeowners to alleviate the effect of increased dues and taxes on low-income residents who have lived in their homes for seven consecutive years or more.
Homeowners in DC can apply to the Tax and Revenue Office for a family home deduction. The housing market in the District of Columbia has led to an increase in the assessed value of residential real estate. Owners of new properties can receive the CAP credit from the seller for only half of the property in which it was purchased, as long as the credit was in effect on the tax where half of the property was purchased. District of Columbia Government Tax and Revenue Office is located at 1101 4th Street SW Washington DC 20024. For more information about these programs and how to apply or cancel them, visit their website at otr.cfo.dc.gov. If you're looking to buy real estate in Washington DC, there are several tax incentives available that can help you save money. From family home deductions to appraisal limit credits and more, there are many ways to reduce your overall costs when purchasing property in DC.
It's important to understand all of your options so that you can make an informed decision about your purchase. The family home exemption is one way to save money when buying real estate in Washington DC. This program is available to individual landlords who maintain their property as their primary residence. Active-duty military personnel can also declare DC as their home address by filing form DD 2058 with their military finance office.
In addition to this exemption, there is also an appraisal limit credit available to homeowners who are looking to limit increases in their real estate taxes. This credit will appear automatically on your real estate tax bill if you meet certain criteria set forth by the District Tax and Revenue Office. Small retailers operating qualifying businesses may also be eligible for a refundable credit on their commercial franchise tax return if they pay real estate taxes at a qualifying retail establishment. DC Metropolitan Police Department officers who are first-time homeowners may also be eligible for a variable-scale real estate tax credit when they purchase a home in DC.
Finally, there is also a credit available for low-income and long-term homeowners who have lived in their homes for seven consecutive years or more. This credit helps alleviate some of the burden associated with increased dues and taxes on low-income residents living in DC. For more information about these programs and how to apply or cancel them, contact our OTR Customer Service Center at (20) 727-4TAX (727-482) or visit otr.cfo.dc.gov.