What Taxes Do I Pay When Buying a House in DC?

When you buy a home in DC, the main tax at closing is the deed recordation tax. The rate is 1.1% of the price for homes under $400,000 and 1.45% for homes at $400,000 or more, according to DC's Office of Tax and Revenue. Eligible first-time buyers may qualify for a reduced recordation rate of 0.725%. The seller typically pays a separate transfer tax.

Recordation tax vs. transfer tax

DC charges two taxes when a deed is recorded. The recordation tax is paid by the buyer, the person receiving the property. The transfer tax is paid by the seller. Both use the same rates: 1.1% under $400,000, and 1.45% on the entire price at $400,000 or more. In practice, contracts can shift who pays what, so read yours closely.

What this looks like in dollars

• $350,000 home: 1.1% recordation tax is about $3,850.
• $500,000 home: 1.45% is about $7,250.
• $500,000 home, eligible first-time buyer at 0.725%: about $3,625.

These are estimates to show the math. Your title company will give you exact figures, including any credits or exemptions that apply.

The first-time buyer rate

DC offers a reduced recordation tax rate of 0.725% to eligible first-time buyers. Eligibility rules apply, so ask your title company and lender early to confirm you qualify and which paperwork they need. DC also has down payment assistance programs, such as HPAP and DC Open Doors. Terms change, so check with DC's housing agencies or a participating lender for current details.

Other costs at closing

Taxes aren't the whole picture. Expect to see:

1. Recording fees. Charged for recording the deed and the loan documents.
2. Title insurance and settlement fees. These vary by title company.
3. Lender fees. Origination, appraisal, credit report, and others.
4. Prepaids and escrows. Homeowners insurance and your first property tax deposits.
5. Condo or co-op fees. If you're buying a condo, you may owe capital contributions or document fees.

Property tax is separate

The recordation tax is a one-time cost at purchase. Annual real property tax is a different bill. DC residential rates are listed on the Office of Tax and Revenue site, and homestead and other deductions may apply if you live in the home. Ask your agent or the tax office what you'd owe on a specific address.

How to avoid surprises

• Ask for a Loan Estimate early and compare it to your closing disclosure.
• Ask your agent to estimate your recordation tax before you make an offer.
• Ask whether you could ask the seller for help with closing costs. It's negotiable, not guaranteed.
• Keep a cushion beyond the minimum cash you've been quoted.

FAQ

Who pays the recordation tax in DC?

The buyer typically pays the recordation tax and the seller pays the transfer tax, but the contract can change that.

What is the DC recordation tax rate?

1.1% under $400,000 and 1.45% at $400,000 or more, per DC OTR.

Is there a discount for first-time buyers?

Eligible first-time buyers may get a 0.725% recordation rate. Confirm eligibility with your title company.

Is the recordation tax the same as property tax?

No. Recordation tax is a one-time closing cost. Property tax is billed annually.

Can the seller help with closing costs?

Sometimes. It's negotiable and not guaranteed.

Next step

Comparing DC and Maryland? Start with my buyer resources, or contact me and I'll walk through your estimated costs. Want to talk it through? Grab a free 15-minute call at calendly.com/michaelwaderealtor/15min. No pressure.