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A Washington Post article about DC’s property tax lien sales sparked outrage this week. According to the investigative report, since 2005, hundreds of DC property owners have lost homes due to the sale of tax liens. One of those delinquent tax bills was only $44.

When a DC homeowner fails to pay property taxes, the DC Office of Tax and Revenue (OTR) imposes a lien on the home.  If the lien goes unpaid for a certain period of time, OTR sells the lien to an investor at an annual auction. The homeowner then owes the delinquent tax bill plus interest to the investor.  If the homeowner is unable to pay within six months, the investor can start foreclose proceedings. In order to avoid foreclosure, the owner must pay back the original tax bill, interest, and…

The DC Homestead Deduction went up earlier this year. When we last wrote about the tax benefit in 2012, it was $67,500. But now the DC Office of Tax and Revenue (OTR) has increased the deduction to $69,100.

Periodically, OTR will increase the DC Homestead Deduction based on cost of living adjustments. For historical reference, the deduction was $60,000 in 2006 and 2007. In 2008, it increased to $64,000. 

The DC Homestead Deduction benefits District residents who own and occupy property. It helps save you money in two ways -- by reducing your annual tax liability and providing a cap on the assessed value of your property.

The latest increase in the DC Homestead Deduction will reduce the annual property tax bill of qualified owners. It works by…

The DC Homestead Deduction is a real estate tax benefit for District residents who own and occupy property.  This deduction can save you hundreds each year by reducing your annual tax liability and providing a cap on the assessed value of your property.

There are a few criteria that must be met to qualify for the DC Homestead Deduction.  First, you must occupy the property shortly after closing as your principal residence.  In addition, the property must contain no more than five units, including yours.  For example, if you own a condo complex with 200 units, the building would not qualify for the DC Homestead deduction.  If you own a single family home or a smaller apartment building, then you would be eligible for the DC Homestead deduction. 

So how…

Washington DC transfer and recordation taxes are part of your closing costs when buying or selling real estate.  Payment of Washington DC transfer and recordation taxes are typically split between buyer and seller.  Make sure you carefully exam your contract regarding who is paying the Washington DC transfer and recordation taxes.  Purchasers often ask the seller to pay part or all of their Washington DC transfer and recordation taxes.  Your lender should provide you with an estimated costs of closing.  The HUD-1 should be reviewed thoroughly before settlement to understand who is paying for these closing costs.  You can review a blank HUD-1 here.  The taxes will be written into your HUD-1 on lines 1201 through 1206 and you can review this at the time of…