DC let owners with permits for mostly long-term new housing seek residential tax rates

Owners could apply to have permitted housing property classified for the residential property tax rate. The permit had to cover new housing meant mostly for long-term homes or a major renovation of an existing building meant solely for long-term homes. Owners had to provide complete documents required by DC’s finance chief before the classification took effect. For property already improved or assessed under another tax rule, only the part used solely as homes got the residential rate. Owners of property with homes and other uses still had to file for the next tax year once occupancy approval was issued and the annual assessment was made. The law applied as of April 1, 2025, and expired 225 days after taking effect.

Tax officials applied the residential rate according to when the property was reclassified. This covered property reclassified through permits for mostly long-term new housing or major renovations solely for long-term homes. For property already improved or assessed under another tax rule, only the part used solely as homes received the rate. The classification began in the half tax year of the application. The full-year rate applied to reclassifications from October 1 through March 31; the second-payment rate applied from April 1 through September 30.

DC’s finance chief had to reclassify property and charge unpaid taxes if the residential-use or permit-renewal test failed. This applied to property given the residential rate through a permit for mostly long-term new housing or a major renovation solely for long-term homes. The property had to be put to mostly residential use by the earlier of a new or amended occupancy approval for any part of the building or three years after the permit was issued. An expired permit also triggered this rule if it went unrenewed for one year. Other tax rules cited in the law could affect the recalculation. DC’s finance chief could give owners more time or waive interest and penalties to prevent hardship. Interest and penalties ran from the date the unpaid tax was originally due.

Owners could request a review and appeal its final decision. This covered owners seeking classification through a permit for mostly long-term new housing or a major renovation solely for long-term homes. Review was available if the permit-based residential classification was denied or taken back. The 45-day period began on the date of the denial notice.