A Homeowner's Guide to Property Taxes in Washington, D.C.

Owning a home is an exciting investment. As a homeowner, understanding the District’s property tax system is crucial for managing your finances effectively. This guide breaks down the essentials of what you need to know.

How Property Taxes Are Calculated

Your annual property tax bill is determined by two key factors: your property's assessed value and the current tax rate for its classification.

1. Assessed Value: The Office of Tax and Revenue (OTR) assesses the value of your property each year. This is their determination of your property's market value.
2. Property Classification & Tax Rates: Properties are grouped into different classes based on their use. Each class has a different tax rate, which is applied to every $100 of the assessed value.

For residential properties (Class 1), the system is straightforward. The most common residential tax rate is $0.85 per $100 of assessed value.

Example: If your home is assessed at $600,000, your annual tax would be calculated as:

($600,000 / 100) * $0.85 = $5,100 per year.

Important Exemptions and Relief Programs

D.C. offers several programs that can significantly reduce your property tax burden. The most common is the Homestead Deduction.

• Homestead Deduction: If your D.C. property is your primary residence, you can apply for the Homestead Deduction. This program subtracts a large amount from your property's assessed value before the tax is calculated, saving you hundreds of dollars each year. You must file an application (Form ASD-100) to receive this benefit.
• Senior Citizen Tax Relief: Eligible senior homeowners may qualify for additional tax relief, which can further reduce their annual bill.
• Other Credits: The District also offers credits for renovations of historic homes and for properties with features that improve accessibility for people with disabilities.

Key Dates to Remember

Property taxes in D.C. are paid in two installments:

• The first half is due by March 31st.
• The second half is due by September 15th.

Navigating property taxes can seem complex, but you don't have to do it alone. If you have questions about how property taxes might impact your purchase or want to ensure you're taking advantage of all available deductions, our team of experts is here to help.