DC Lowers Transfer Taxes for First Timers
DC’s city council just voted in a reduction in transfer taxes to .725% of the purchase price. This is a first time buyer benefit for eligible purchasers whose income is less than 180% of the area median income. That income cap is going to be approximately $190k a year.
This looks to go into effect after March 2017 but we await a specific date still, since the legislation is so new and awaits Mayor Bowser’s signature.
Thanks to the DC Association of Realtors for working with the council on this legislation. Their press release is here.
DC (previously) had the highest transfer taxes for buyers in the region, at 1.1% for purchases $399,999 and below and 1.45% for purchases $400,000 and higher.
The savings will be significant. On a $500,000 purchase it’s a savings of $3625 in upfront costs. This’ll make closing costs in DC be around a total of 3% for most qualifying purchasers.
For those purchasers who don’t qualify for the benefit, the transfer taxes will remain the same (1.1% for $399,999 and below, and 1.45% for $400,000 and above). These transfer tax figures also apply for when you sell your home.