Overview of District of Columbia Taxes
Homeowners in the nation’s capital pay some of the lowest property tax rates in the country. In Washington, D.C., the average effective property tax rate is 0.55%. However, the median real estate property tax payment is $2,930, which is the 14th highest mark in the U.S.
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To calculate the exact amount of property tax you will owe requires your property's assessed value and the property tax rates based on your property's address. Please note that we can only estimate your property tax based on median property taxes in your area. There are typically multiple rates in a given area, because your state, county, local schools and emergency responders each receive funding partly through these taxes. In our calculator, we take your home value and multiply that by your county's effective property tax rate. This is equal to the median property tax paid as a percentage of the median home value in your county.
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Jennifer Mansfield Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Washington, D.C. Property Taxes
When it comes to property tax rates, Washington, D.C. homeowners have some of the lowest in the country. The tax rate on residential property in D.C. is just $0.85 per $100 in assessed value. However, that rate may overstate the amount paid by many homeowners.
You must also take into account the generous deductions and credits the District offers many homeowners, which brings the average effective property tax rate in Washington, D.C. to just 0.55%. That is the fourth lowest rate in the country, and far lower than other nearby cities such as Baltimore and Philadelphia.
For information on mortgage rates and details about getting a mortgage in D.C., take a look at our Washington, D.C. mortgage guide.
A financial advisor in Washington, D.C. can help you understand how homeownership fits into your overall financial goals. Financial advisors can also help with investing and financial plans, including taxes, homeownership, retirement and more, to make sure you are preparing for the future.
Property Assessment in Washington, D.C.
The assessed value of a property is the amount to which taxes are applied. In Washington, D.C. residential property is assessed at its full market value. That means the assessed value of a home should equal the amount it would sell for on the open market.
Washington, D.C.’s Office of Tax and Revenue (OTR) is responsible for property assessments, which it completes on an annual basis. These usually do not involve a physical inspection of the property or a full appraisal. Instead, the OTR uses mass appraisal techniques that rely on market data and other factors to reassess many properties at the same time.
While the results of a mass appraisal are generally accurate, on a given property they can be incorrect. Homeowners should review their annual reassessment notice and confirm that their assessed value is roughly equal to the expected sales price of the property.
Homeowners who believe their house has been over-assessed can file an appeal with the Real Property Tax Administration. Appeals must be filed by April 1 to be considered. Homeowners who file an appeal should be prepared to offer evidence in support of their position. Evidence may include sales prices of nearby, comparable homes or property features that the assessor failed to consider.
Looking to calculate your potential monthly mortgage payment? Check out our mortgage calculator.
Washington, D.C. Property Tax Deductions and Credits
Homeowners in D.C. benefit from a number of property tax deductions and credits that greatly reduce their overall tax bill. A deduction does this indirectly, by reducing the assessed value of a property, while a credit directly reduces the taxes a homeowner has to pay. The major deductions and credits available to homeowners in Washington, D.C. are described below.
The Homestead Deduction is available for homeowners living in a principal residence that consists of no more than five units. It reduces assessed value by $73,350. At the current property tax rate of $0.85 per $100 in assessed value, the Homestead Deduction can save a homeowner about $620 annually.
The Senior Citizen or Disabled Property Owner Tax Relief program reduces the property tax bill of eligible homeowners by 50%. Eligible homeowners must be at least 65 years old or disabled. The property in question must be their primary residence and have no more than five units. They cannot have a total federal adjusted gross income of greater than $130,550 either.
The First-Time Homebuyer Individual Income Tax Credit is a tax credit available to new homeowners in Washington, D.C. It is generally equal to the lesser of $5,000 ($2,500 if married filing separately) or the purchase price of a home. It is an income tax credit, so new homeowners should apply for it when completing their income taxes.
The Assessment Cap Credit protects homeowners from rapid increases in house prices. The credit limits increases in assessed values to 10% per year. Increases beyond that amount will reduce the taxable assessed value of your home.
Washington, D.C. Property Tax Rates
As described above, the total property tax rate in Washington, D.C. is $0.85 per $100 in assessed value. So let’s say you have a home with a market value of $300,000. It's assessed at $300,000, but since it is your principal residence, you are eligible to receive the Homestead Deduction. That will reduce your assessed value to $226,650. Applying the rate of $0.85, you would owe $1,927 annually.
That means your effective property tax rate, which is your annual payments as a percentage of your home value, would be 0.64%. In Washington, D.C., the overall average effective property tax rate is 0.55%, which is tied with Colorado for the fourth lowest rate in the nation.
Places Receiving the Most Value for Their Property Taxes
SmartAsset’s interactive map highlights the places across the country where property tax dollars are being spent most effectively. Zoom between states and the national map to see the counties getting the biggest bang for their property tax buck.
Our study aims to find the places in the United States where people are getting the most value for their property tax dollars. To do this, we looked at property taxes paid, school rankings and the change in property values over a five-year period.
First, we used the number of households, median home value and average property tax rate to calculate a per capita property tax collected for each county.
As a way to measure the quality of schools, we analyzed the math and reading/language arts proficiencies for every school district in the country. We created an average score for each district by looking at the scores for every school in that district, weighting it to account for the number of students in each school. Within each state, we assigned every county a score between 1 and 10 (with 10 being the best) based on the average scores of the districts in each county.
Then, we calculated the change in property tax value in each county over a five-year period. Places where property values rose by the greatest amount indicated where consumers were motivated to buy homes, and a positive return on investment for homeowners in the community.
Finally, we calculated a property tax index, based on the criteria above. Counties with the highest scores were those where property tax dollars are going the furthest.