FIRST TIME DC OWNER
Are you a first time buyer in Washington, DC? If so, you may be eligible for a significant reduction in your closing costs. As you may know, all DC buyers must pay a recordation tax to the DC Government when they purchase real property. In an effort to encourage home ownership, DC is offering a significantly reduced recordation tax rate for all first-time buyers who qualify for the program.
What Is the Savings?
For a first-time DC homebuyer, the recordation tax rate is reduced from either 1.1% or 1.45% of the sales price (depending on the price of the property) to .725%. For example, if you are purchasing a home for $500,000 and you qualify as a first-time buyer, your recordation tax is reduced from 1.45% to .725% of the sales price. That calculates to a reduction in the recordation tax from $7250 to $3625--a savings of $3625. That’s real money!
How Do I Know If I Qualify?
The requirements are simple:
- Qualify as a DC First Time Buyer and intend to live there. You may also qualify if you are divorced and you gave up ownership of the home you jointly owned with your spouse as part of the divorce.
- Purchase price $632,500 or lower (as of October 1, 2018)
- Meet household income limits. You may qualify if your income is as high as $147,780 for 1 person in the household. The income level increases as you add additional people in the household.
- Submit application and supporting documentation at closing
- A copy of the application can be found here. https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/ROD%2011_0.pdf
If you have any questions about whether you may qualify as a DC First Time HomeBuyer please call Paragon Title at 301-986-1114 or email us at [email protected] and one of our attorneys will be happy to talk to you about it.
