SMART FAQ on DC Homestead and Senior Citizen Tax Benefits
DISCLOSURE: The facts provided in this article are for informational purposes only and are deemed accurate at the time it was published. For the most updated information, visit the website of the DC Office of Tax and Revenue.
Homestead Deduction
The Homestead Deduction reduces the assessed value of your property, meaning the amount for which you are taxed is reduced as well. The rate of reduction can change, but as of this writing, the assessment reduction equals $74,850 — a savings of $636.23 annually. To see the most current amounts, visit the website of the DC Office of Tax and Revenue (OTR).
To qualify for the DC Homestead Deduction:
- The property must be the primary residence of the applicant.
- The property cannot contain more than five units.
- The property owner must have an application on file with the OTR.
There are some owners who generally do not qualify, such as non-US citizens, G-4 visa holders, companies, and trusts.
As a courtesy, Smart will prepare and submit your application for you after closing.
Links:
If the application is approved between October 1 and March 31, then the Homestead benefit will be applied to the entire tax year as well as all subsequent tax years. However, if the application is approved between April 1 and September 30, the Homestead benefit will be applied to the second half of the tax bill for the first year, with subsequent years receiving the full-year benefit.
If you fall out of qualification for this tax benefit, such as changing your primary residence, then you must cancel the Homestead Deduction. Failure to do so can result in an audit. Canceling the deduction can be done online or with a form for the OTC.
Senior Citizen or Disabled Property Owner Tax Relief
When property owners turn 65 years of age or are at the point in which they are given disabled status, they then can file for Senior Citizen or Disabled Property Owner Tax Relief. The benefit of this tax relief equals 50% of the owner’s property tax bill. If the owner lives in a cooperative housing association, then the coop supplies and collects all of the applications.
To qualify for the Senior Citizen or Disabled Property Owner Tax Relief:
- The owner must have a 50% or more stake in the property or unit.
- The total tax year federal adjusted gross income of all those living in the property or coop must be less than $133,100 for the 2019 calendar year (excluding tenants).
- The owners must also meet the requirements of the Homestead Deduction.
A low-income senior resident can defer real property taxes (both past due and prospective) at either 0% or 6% interest, depending on the applicant’s age, income, and length of residency. The Office of Tax and Revenue (OTR) provides an application for the deferral below. Do not forget to fill out a statement of income along with the application.
Links:
Low-Income Deferral Application
Denials
If an application was not accepted by the OTR, the owner can print out an appeal application here and submit it to the OTR.
For more information or answers to specific questions, please email homestead@dc.gov.
For additional information on this topic contact Evelyn Miller, Partner, at 202-753-7400.
