Written By: Urban Turf
Councilmember David Grosso introduced legislation on Tuesday that would reduce the recordation tax rate for first-time homebuyers in DC from 1.45 percent to .725 percent of the property sales price. The recordation tax is collected by the city on all home purchases and goes to help fund the Housing Production Trust Fund.
“Not only will this legislation encourage homeownership, but it will also bring the District of Columbia in line with surrounding jurisdictions,” Grosso said on Tuesday. “Currently, D.C.’s transfer and recordation taxes are on average 50% higher than neighboring Maryland and Virginia.”
The First-time Homebuyer Tax Credit Amendment Act of 2014 would apply to DC residents that have never owned a home as well as individuals who have divorced or separated and a “formal settlement did not convey an ownership interest in a principal interest.” The purchased property would have to serve as the buyer’s primary residence.
For years, first-time buyers in the District enjoyed a $5,000 tax credit when they bought a home in the city, but the credit lapsed in 2011.
UrbanTurf will continue to monitor this bill as it moves forward.