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Other Credits and Deductions
District of Columbia property owners may be eligible for property tax relief. The District offers several programs to assist property owners and first time homebuyers. Select from the following programs to check eligibility and filing requirements. For more information about these tax relief and credit programs, contact our OTR Customer Service Center at (202) 727-4TAX (727-4829).
Assessment Cap Credit
The housing market in the District of Columbia has caused a surge in the assessed value of residential real property. In an effort to limit the increase of real property taxes for homeowners, eligible homeowners will be provided an Assessment Cap Credit.
The Assessment Cap currently provides that a property may not be taxed on more than a 10 percent increase in the property’s assessed value each year. This credit does not reduce the assessed value of your property on the tax roll or the assessment notice, but it will appear as an automatic credit against your real property tax bill. For more information, property owners may call the OTR Customer Service Center at (202) 727-4TAX (727-4829). If you have been denied the Assessment Cap Credit and you believe that you are eligible, please contact the Homestead Unit, PO Box 176, Washington, DC 20044 or call Customer Service at (202) 727-4TAX (727-4829).
First-Time Homebuyer Individual Income Tax Credit
For homes purchased on or before December 31, 2011
This federal tax credit is available to first-time homebuyers in the District of Columbia. The credit is the smaller of:
- $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er) ($2,500, if married filing separately) or
- The purchase price of the home.
In general, you may claim the credit if:
- You purchased a main house during the tax year in the District of Columbia, and
- You (and your spouse, if married) did not own any other main home in the District of Columbia during the 1-year period ending on the date of purchase.
Income restrictions and other qualifications may apply. You must file the federal form 1040 to claim this credit. For more information, contact the Internal Revenue Service at (800) 829-1040 or visit the local IRS Taxpayer Assistance Center located at 500 North Capitol Street, NW, Washington, DC.
Historic Properties Program
For information on special District programs for historic real properties, please contact:
This benefit reduces your real property
- An application must be on file with the Office of Tax and Revenue;
- The property must be occupied by the owner/applicant and contain no more than five dwelling units (including the unit occupied by the owner); and
- The property must be the principal residence (domicile) of the owner/applicant.
If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead benefit for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the benefit reflected on the second-half tax bill (and full deductions for all tax years in the future).
- Homestead and Senior Citizen Tax Benefit Appeal Application [PDF]
- Cancellation of Homestead Deduction [PDF]
- Homestead Reconfirmation Audits [PDF]
- Co-op Housing and Property Transferred to a Trust
Individual Income Property Tax Credit
The Individual Income Tax Credit reduces the DC individual income tax liability of eligible homeowners and renters by up to $1000. The total 2014 federal adjusted gross income (AGI) of your “tax filing unit" was $40,000 or less ($60,000 or less if you are age 70 or older).
To apply, file a Schedule H (Property Tax Credit Form) with your Form D-40 (Individual Income Tax Return). These forms are available in Personal Income Tax Service Center under Individual Income Forms/Publications.
For more information, please call or visit the OTR Customer Service Center at (202) 727-4TAX (727-4829) for more information.
Limited-Equity Cooperative Tax Fairness
- The aggregate estimated market value of proprietary lease, stock, or other interests in the co-op association as of January 1 preceding the date of assessment, or
- If information is insufficient, the estimated market value of the property is assessed as if it were a condominium determined under the comparable sales approach multiplied by 70 percent, or
- The annual amount residents pay in carrying charges (excluding subsidies), divided by an appropriate capitalization rate as determined by OTR. If property ceases to be an LEC, then it will be assessed under either (1) or (2) above.
Lower Income Home Ownership Tax Abatement
Eligible homeowners, including non-profit organizations and shared equity investors, may receive a five-year tax abatement and be exempt from paying recordation and transfer taxes. The five-year period for the Lower Income Home Ownership Tax Abatement begins on October 1, after your deed has been recorded and you have previously applied for the abatement. To qualify, you must meet the following conditions:
- The property must be owner-occupied;
- The owner must meet the income level requirement; and
- The property must be less than $356,000 in value
If you qualify, submit a Lower Income/Shared Equity Home Ownership Exemption Application and Claim for Exemption from Real Property Recordation and Transfer Tax when you record your deed. These forms can be found in the OTR Recorder of Deeds.
Lower Income, Long-Term Homeowners Tax Credit
- You must have owned and occupied the property as your principal residence for at least the last seven (7) consecutive years;
- The property must be receiving the Homestead Deduction;
- The total household income of all household members of your residence must not exceed the Household Income Limit Table listed in Section D on the Schedule L; and
- Your application must be filed by December 31 of each year.
Interested homeowners should call (202) 727-4TAX (727-4829) for more information. Schedule L Lower Income Long-Term Homeowner Credit [PDF]
Metropolitan Police Housing Assistance Program
DC Metropolitan Police Department officers who are first-time homeowners and live in their homes may be eligible for a sliding-scale real property tax credit. To apply, please call Housing Counseling Services, Inc. at (202) 667-7006.
Property Tax Deferral
If your total household Adjusted Gross Income (AGI) is $50,000 or less, you may qualify for the low-income or low-income senior citizen property tax deferral. This program allows you to defer payment of increases in your property tax, or (if you are a senior citizen with household AGI of $50,000 or less) to defer your entire annual tax bill.
If you have lived in a Class 1 property for a year or more, and your tax is more than 10% higher than the previous year's tax, you may defer payment on the amount over the 10%.
To be eligible for the property tax deferral program, you must file an application and meet the following conditions:
- You must have owned your home for at least 1 year before the application date;
- You must have occupied the home for the 12-month period immediately before the application date;
- You must currently occupy the property;
- The current year's tax must be more than 10% higher than the previous year's tax;
- The total of all taxes deferred, plus annual interest of 8% accrued on the deferrals, must not exceed 25% of the property's assessment for the real property tax year in which the deferrals are provided.
You must file an application by March 31 to defer the first-half tax or by September 15 to defer the second-half tax.
For further information about this program, see the Tax Deferral for Low-Income and Low-Income Senior Property Owners Application [PDF] on the Real Property Tax Forms page, or call the OTR Customer Service Center at (202) 727-4TAX (727-4829).
Real Property Tax Exemption
The Application For Exemption From DC Real Property Tax is for use by nonprofit organizations who wish to apply for exemption from the District of Columbia real property tax. All questions must be fully answered or the application will be considered incomplete. The completed application, together with all documents requested in the instructions, should be mailed to:
Real Property Assessment Division
1101 4th Street, SW
Washington, DC 20024
or delivered to:
Office of Tax and Revenue
Customer Service Center
1101 4th Street, SW
Washington, DC 20024
Failure to submit any of the required information will delay action on the application for exemption and may result in a denial.
Organizations applying for exemption from DC real property tax must own the real property for which the request is made and qualify under DC Official Code § 47-1002. The applicant must specify the subsection of § 47-1002, detailing the major categories of exempt property, pursuant to which the exemption is sought. Current and proposed use of the property must be indicated, and a physical inspection of the property by this office is required. If any part of the property is leased, the tenant must supply the same types of documents that the owner must furnish with this application. Applications for exemption for property owned by foreign governments must be made through the U.S. Department of State, Office of Foreign Missions.
The exemption, if approved, will commence the first full month following the date the application is approved, provided the requirements for exemption are met.
Resale Restricted Properties
The assessed value of such property shall be computed by:
- First determining the year in which the current property owner received the property.
- The base assessed value for that year is the amount paid by the current property owner for the property, excluding amounts received from government agencies or housing organizations that are not likely to be repaid.
- For subsequent years in which restrictions remain in effect, the assessed value will be the base amount, using Bureau of Labor Statistics for the Washington-Baltimore metro area, adjusted for inflation.
- If the RRP was acquired without significant consideration, the base assessed value for the first year will be the fair market value of the property, taking into account all restrictions, and then in later years under the method described above.
In order to qualify for this preferential tax treatment, the property owner needs to supply to the Office of Tax and Revenue the following information:
- The name and address of the owner.
- The premise address and square, suffix, lot of the property.
- The purchase price of the property.
Interested owners of “resale restricted properties” should call the OTR Customer Service Center at (202) 727-4TAX (727-4829) for more information.
Senior Citizen or Disabled Property Owner Tax Relief
When a property owner turns 65 years of age or older, or when he or she is disabled, he or she may file an application immediately for disabled or senior citizen property tax relief. This benefit reduces a qualified property owner's property tax by 50 percent. If the property owner lives in a cooperative housing association, the cooperative will supply and collect the applications. The following guidelines apply:
- The disabled or senior citizen must own 50 percent or more of the property or cooperative unit;
- The total federal adjusted gross income of everyone living in the property or cooperative unit, excluding tenants, must be less than $127,100 for the prior calendar year; and
- The same requirements for application, occupancy, ownership, principal residence (domicile), number of dwelling units, cooperative housing associations and revocable trusts apply as in the homestead deduction.
Tax Deferral For Low-Income Senior Property Owners And Low-Income Property Owners
Effective October 1, 2014, low-income seniors may defer real property taxes, past due and prospective, at either 6% interest or no interest, depending upon age, income and length of residency. OTR has devised a form with which the senior must apply.
The Homestead Deduction, and Senior Citizen or Disabled Property Owner Application is available on the Real Property Tax Forms page.
If a properly completed and approved application is filed from October 1 to March 31, the property will receive the deduction for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the deduction reflected on the second installment (and full deductions for all tax years in the future).
A trash credit deduction may be issued for owners of condominiums, cooperative dwelling units, or certain homeowners who pay for garbage collection instead of receiving city garbage service. The trash credit is $98 for 2011. In order to qualify, the following circumstances must be met:
- The property must be either: 1) a single dwelling unit owned as a condominium; 2) a single dwelling unit that is owned by a member of a homeowner association; or 3) a cooperative dwelling unit.
- The dwelling unit must be located in a condominium building or a cooperative housing association building with more than four dwelling units.
- The housing association, condominium, and cooperative housing association must not receive trash collection services from the District of Columbia.
- The property must be occupied by the owner and used for non-transient residential purposes.