1. Learn about this resource. 

Homeowners can get up to five years of tax abatement for their property taxes, meaning they do not have to pay property taxes on their home for up to five years. This benefit starts on October 1st of the year that you apply for the program. With this program, you also do not have to pay the recordation, meaning you would not have to pay to transfer deed information. These taxes and fees are waived and not owed later.

 

This program is called the Low Income Home Ownership Tax Abatement Program and is offered by the Office of Tax and Revenue.

2. Check if you are eligible.

You are eligible if all of these statements are true:

  • You own the home that you live in (or you will own the home that you will live in).

  • Your home (or soon-to-be home) is in DC.

  • You bought (or are buying) a home for less than $484,000 as of October 2020.

  • Your household income does not exceed the limits based on your household size and the home’s location. 

reduce the taxes you owe when you buy a home?

DO YOU WANT TO

3. Apply.


  1. If you are in the process of buying a home, your title company will prepare documents and complete the application for you. You will sign the application during the closing process.
  2. Your title company will submit the application when they are filing the deed record with the Office of Tax and Revenue.





4. Gather more information.

What happens after I apply?


  1. We—the DC Government— will send you a letter confirming that you are approved.
  2. We will record that no taxes (recordation and possibly transfer tax) were collected by the District and a note on your account that you do not have to pay property taxes for the next five years.
  3. Either your title company or the Office of Tax and Revenue will issue you a refund for any taxes paid.
If you are not approved, you will receive a property tax bill from the Office of Tax and Revenue. If you think this is in error, you have the right to appeal.




Are there any additional requirements I should know about?


The Office of Tax and Revenue checks each year to make sure you are still eligible for the tax break. This means you’ll need to provide proof of income each year. You must notify the Office of Tax and Revenue at e-services.otr@dc.gov within 30 days of 1) an increase in household income above the threshold for your household size, 2) if the property is no longer your primary residence, or 3) if there is a change in ownership. If you don’t, you may end up having to pay back taxes with penalty fees.




Who should I contact if I have questions?


First, take a look at the frequently asked questions at the bottom of the page. If you still have questions, please reach out to our Office of Tax and Revenue’s Special Programs Unit at (202) 727-5374, Monday to Friday, 8:15 am to 5:30 pm. Or, you can email the team at e-services.otr@dc.gov using the subject line “Home Ownership Tax Abatement.”




I still need help paying my property taxes. What should I do?


You can find information about other resources that might help you save on taxes on our resource page.




Frequently Asked Questions


Do I need to be a first-time homebuyer to qualify for the program? No. I recently bought a property and think I’m eligible for these savings. Is it too late for me to apply? While you typically need to apply for these savings when you close on the property, you can apply up to three years after you made the purchase. In this case you would be eligible for a refund of the recordation tax and property taxes in future years. You cannot receive a refund on property taxes paid before you applied. What is the penalty for failing to notify the DC Government of changes to my income, residence, or property ownership? The penalty is an additional 10%, meaning that you must pay the tax owed and an additional 10% of that amount. In addition, you must pay 1.5% interest on the tax bill for each month that you were ineligible. Can cooperative housing associations apply for these benefits? Yes. In that case, the cooperative would need to submit a single application that demonstrates that at least 50% of the property’s units are occupied by households that meet the income requirements.




Do all eligible applicants get the tax abatement?


No. There are limits on how often you can receive the tax abatement, depending on the location of your home. If the home is in an Economic Development Zone, then there is no limit to the number of properties who can receive the tax abatement.





This resource is provided by:

Keywords: reduce property taxes, closing cost assistance, homebuying assistance, homebuyer, homeowner, income limits

This page was last updated May 2021.

OTR Logo_New.jpg