DC Tax Abatement
In this video Deirdre P Brown explains the Tax Abatement available to homebuyers in the District of Columbia.
Hello my name is Deirdre Brown your settlement agent serving Maryland, DC and Virginia. Today we're going to talk about the DC Tax Abatement. The official name is the Lower Income Homeownership Tax Abatement.
If you are a buyer and are purchasing a property in DC as your principal residence and fall within the income guidelines you can request that DC not charge you real property taxes for five years. In addition the buyer will not have to pay the 1.1% recordation tax and the seller will need to give the buyer a credit, with lender approval, for the 1.1% transfer tax.
This is a great tax abatement program for those people who qualify. In order to qualify the property must be owner-occupied. You have to meet income requirements and the property value must be less than $439,160, as of today's taping. They change that number about yearly. The income ranges are pretty generous as of December 1st 2016 the income chart is if you're one-person household you have to make under $58,980 and a two person household has to make under $67,300 possibly fifty eight thousand nine and it goes all the way up to $111,000.
If you're purchasing a property in a economic development zone then the income requirements are a little higher for one person it is $67,265 and for a two person household it is $76,890 and goes all the way up to $120,000.
To apply you will need to fill out the application. You will need attach a copy of your ratified contract. You need to attach a copy of the settlement statement as well as your proof of income.
The deadline to apply is September first and then the abatement will go into effect as of October 1st of any tax year. Once you get your letter stating that you have actually been approved for the tax abatement you need to make sure you send that letter off to your lender. Especially if your lender is escrowing your property taxes so they'll know that you now are receiving an abatement .
If you have any other title related questions please reach out to me at closewithdee.com