Soul of the City district could tax nonexempt property with mayoral approval

The district would charge taxes on certain property if the Mayor approved the district. The rates cover nonexempt property in the approved area. The value-based rate excludes hotels. The Mayor must review and approve the district before its taxes apply. Taxes would begin with the half tax year starting April 1, 2026. They would end when the act expired or the district ended, whichever came first.

The district would charge $120 a year per covered rental unit. The charge covers nonexempt units in Class 1A properties with at least five long-term rental units first used after July 17, 1985. Other Class 1A and Class 1B property is exempt. The Mayor must approve the district before its taxes apply. The district must identify and certify exempt units. Each must be income-restricted under a federal or D.C. affordable housing program and have household income at or below the area's median income. The tax would begin with the half tax year starting April 1, 2026, and end when the act expired or the district ended, whichever came first.

The district must exempt property after it certifies the owner's qualifying safety spending. The exemption covers property otherwise subject to the tax in the Mayor-approved district. The owner must prove spending of more than $250,000 in the previous tax year. The spending must be for safety work that improves adjoining public space or adds retail security for the property. The district must certify the spending. The exemption applies in the tax year after the spending, while the act and district remain in effect.

The district would charge a leaseholder or land user for certain buildings on land exempt from property tax. The rule covers taxable buildings built under ground leases on land exempt from property tax in the district. The Mayor must approve the district before its taxes apply. The tax value includes the building and the value of the right to use the land. The tax period would begin with the half tax year starting April 1, 2026, and end when the act expired or the district ended, whichever came first.

The district may raise its listed tax rates by 3% a year. The possible increase covers the listed rates for nonexempt Class 2 property, hotel and motel rooms, and covered rental units. The Mayor must approve the district, and any increase must meet additional requirements in the district law. Each possible increase is measured against the current tax year's rates.