Temporary D.C. act let owners with qualifying permits seek residential tax rates

Owners could apply for the Class 1A residential property tax rate. This covered owners with permits to build new buildings mainly for long-term homes or substantially renovate existing buildings solely for long-term homes. Owners had to promptly provide complete proof before the tax class changed. For property already built or assessed under another tax rule, the rate covered only the part used solely as homes. Owners still had to file on time for next year’s tax class for property with homes and other uses if an occupancy approval had been issued when the yearly assessment was made. The act applied as of April 1, 2025, and could last no more than 90 days after approval. A classification change from October 1 through March 31 got the rate for the whole tax year. A change from April 1 through September 30 got it for the second installment only.

D.C.’s tax chief would recalculate taxes for each period when property was wrongly placed in the residential tax class. This covered property placed in the residential tax class because it had a qualifying building permit. The property had to be mainly housing by the earlier of a new or changed occupancy approval for any part of the building or three years after its building permit. A permit that expired and was not renewed within one year could also trigger recalculation. Other tax rules could limit recalculation. The tax chief could grant more time or waive penalties and interest to prevent undue hardship. Penalties and interest began when the correct tax should have been paid.

Owners could ask tax officials to review a denial or reversal and appeal a final decision. This covered owners denied the permit-based residential tax class or whose classification was taken back. An owner had 45 days from a denial notice to request a review.