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DC transfer and recordation tax is due to the Office of Tax and Revenue (OTR) Recorder of Deeds during the sale of residential property in the city. This tax is part of various closing costs such as lender charges, settlement fees, title insurance, escrow reserves, pre-paid interest, and real estate tax. But generally, the DC transfer and recordation tax is the highest of all closing cost line items.

In DC, deed transfer tax is generally paid by the seller, while the buyer covers deed recordation tax.  These tax amounts are calculated based on the purchase price of the home. If the sale is $399,999 or less, then the DC transfer and recordation tax rate is 1.1%. Sales of $400,000 and above are taxed at the rate of 1.45%. For example, if you bought a…

The tax abatement program in DC helps lower income residents purchase a home by eliminating transfer, recordation, and property taxes. Homeownership is part of the American Dream for many, and these tax incentives help more people achieve it for themselves.

In order to qualify for tax abatement in DC, the value of the property purchased must be less than $367,200, and the owner must occupy the property as his principle residence. In addition, there are income limits depending on the number of people in your household. For a person living alone, the maximum allowable gross income (including all jobs, Social Security income, public assistance, retirement pay, unemployment compensation, military housing allowance, etc.) is $56,100. For a family of four,…