First-Timer Primer: Tax Relief for DC Homeowners

• July 13th

by UrbanTurf Staff

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This article is being re-published with updated links. 

When you buy a home in the District, you will have to pay property taxes along with your mortgage and homeowner’s insurance. As housing values shoot up, property taxes may rise just as quickly, creating a greater monetary outlay than what new homeowners initially planned for. Luckily, DC has a few ways to lower the tax burden.

All Owner-Occupants are Eligible for the Homestead Deduction

Homeowners in DC can file an application with the Office of Tax and Revenue for a Homestead Deduction. The primary benefit of the deduction is to bring down the taxable value of your home. According to DC’s Office of Tax and Revenue, the deduction reduces your property’s assessed value by $91,950. To be eligible for the Homestead Deduction, the property must be your principal residence and have no more than five units if it is a multi-family property.

If you can file before tax season (by March 31st), the Homestead Deduction will apply for the entire year and all subsequent years. If you file between April 1st and September 30th, the property will only receive one half of the deduction for that year, and the full deduction for all subsequent years.

Tax Relief for Senior Citizens and Disabled Homeowners

Once a DC homeowner reaches the age of 65, they can file an application for senior citizen property tax relief, which cuts the property tax owed by 50 percent. The same 50 percent reduction is available to homeowners who have been determined by the Social Security Administration to be permanently and totally disabled, or who are receiving District or federal disability payments.

There are two catches worth knowing. First, the applicant must own at least 50 percent of the property, which can trip up some joint-ownership and trust arrangements. Second, there is an income test: to qualify for tax year 2026, the total household federal adjusted gross income for 2024 must be less than $163,500. That figure includes everyone living in the household, excluding tenants paying fair market rent under a written lease.

A Larger Deduction for Disabled Veterans

Veterans classified by the U.S. Department of Veterans Affairs as having a total and permanent service-connected disability — or who are paid at the 100 percent disability rating level as a result of unemployability — can apply for the Disabled Veterans Homestead Deduction, which reduces the property's assessed value by $445,000. The same principal-residence, five-unit, 50-percent-ownership and household income requirements apply. Note that properties receiving this deduction cannot also receive the standard Homestead Deduction, senior/disabled tax relief, or the assessment cap credit.

Lower-Income Seniors Can Defer Their Tax Bill Entirely

Homeowners aged 65 and older with a total household adjusted gross income under $50,000 can defer their entire annual property tax bill. Applicants must have owned and lived in the home for at least a year and occupy it as their principal residence. The deferred taxes become a lien on the property and are repaid when the home is sold.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/first_timer_primer_tax_relief_programs_for_dc_homeowners/6676.