Part One - DC Reduced Recordation Tax for First Time Homebuyers Overview
In this video Deirdre P Brown give an overview of the DC Reduced Recordation Tax for First time Homebuyers that goes into effect on October 1, 2017. Look for the 2nd video on this topic that goes over the required documentation needed for the application.
Hello this is Deirdre Brown your settlement agent serving DC, Maryland and Virginia. Today I'm going to talk to you about the DC Reduced Recordation Tax Program that goes into effect on October 1, 2017.
This program allows your buyer to reduce their recordation tax from 1.1% or 1.45% to 0.75%. This is great news. For example if a condo or a single-family home was priced at $350,000 it would save your home buyer about $1,300 in recordation taxes.
In order to qualify for this reduced recordation tax credit your buyer will need to one be a first-time DC homebuyer and that's defined as never have owned property in the District of Columbia. There is a slight exception. If your buyer was married previously and owned property jointly with their spouse but now they are divorced and no longer have interests in that properties they are now considered a first-time DC homebuyer other than that you could never have own property in the District of Columbia.
This tax credit is income driven. If it's a one-person home the income cap is $139,000. If is a two-person home the income cap is $158,000 and it goes up from there. So you can see how a lot of people will qualify for this because the income is pretty generous.
The buyer will need to submit an application at the time of settlement. It is a three page application and you also need your buyer to submit supporting documentation. I have a separate video where I go over what the supporting documentation is. But this is one of those times where you really need to be ahead of the game and talk to your buyer about it and make sure you're coordinating with your settlement agent too make sure all the documentation is submitted. You can only apply for this reduced recordation tax at the time of settlement.
if you have more title related questions please reach out to me at closewithdee.com