How to Save Thousands on Your First D.C. Home
Have you been considering buying your first home in D.C.? Here is another reason to think about making the move. While there are numerous programs and advantages for first-time homebuyers in DC, there is now also a reduction in the recordation tax you pay at closing.
A part of your closing costs, recordation taxes are paid by all homebuyers in the District. As of October 1, 2017, legislation passed that lowered the recordation taxes for qualified first-time homebuyers in Washington, DC. The First-Time Homebuyer Reduced Recordation Tax significantly lowered the recordation tax for DC homebuyers who meet the application criteria, from 1.45% to 0.725%.
For homes purchased for less than $400,000, the tax will be reduced from 1.1% to .0725% at settlement. For homes purchased at prices between $400,000 and $625,000, the recordation tax will be reduced from 1.45% to .0725%. This reduction will save qualified homebuyers looking to plant their roots in the District thousands of dollars. Check out the chart below for approximate savings at different purchase prices!
Original Recordation Tax
With FTHB Reduction
It is important to note that you must apply for the reduced rate at the time the deed is offered for recordation- it cannot be applied for after the deed is recorded.
You may be able to qualify if you can answer yes to the following questions:
1. Am I, or do I intend to become, a D.C. resident?
2. Is the purchase price of the home $625,000 or less?
3. Do I make less than $139,140 as a single person or $158,940 as a couple? (The income limit increases based on how many family members you have.)
To learn more about qualifications, view the application!
Interested in becoming a first-time homebuyer in D.C.? Then contact us and let us show you properties fit to be your perfect first home!
*Please not qualification for this reduction is subject to specific guidelines as set forth by DC government*