There are many tax benefits to gain by owning a home. Consult your accountant or tax advisor regarding significant tax deductions you can claim as a homeowner. These include the interest paid on your mortgage annually, as well as the closing costs, points, realtor, attorney and inspection fees that you may acquire during your real estate transaction-whether buying or selling.
Taxes also play a role in your closing costs. Each jurisdiction has different tax rates and recording fees. Here is a breakdown of what to expect in terms of taxes for your purchase, sale and beyond in your jurisdiction:
District of Columbia:
Transfer and Recordation Tax: - Transfer Tax: Paid by the Seller upon transferring the deed at closing. 1.1% of sale price for homes less than $400,000. For homes above $400,000, 1.45% of sales price.
- Recordation Tax: Paid by the Buyer upon recording of the deed after closing. 1.1% or purchase price for a home less then $400,000. Above $400,000, 1.45% of purchase price.
Property Tax Rate per $100 of Assessed Value: - Class One Property (Residential): $0.85
- Class Two Property (Commercial): $1.85
- Class Three Property (Vacant): $5.00
Property Tax Relief Programs:
- Class One Residential property owners who are owner-occupants should apply every 5 years for a Homestead Deduction. This eliminates property tax for the first $64,000 of assessed value. If you and/or your spouse are 65 years or older, with a combined income less then $100,000-you may be able to get your payments reduced by half. For the application, click here.
- Eligible home owners can apply for an Assessment Cap Credit. This would cap your assessment so it won’t increase more then 10% each year. For more information click here.
- First-Time Homebuyer federal tax credit-If you bought a home used as your principal residence in DC and didn’t own another in DC for a year prior to purchase, you may qualify to receive a tax credit of $5000 or $2500 each if you are married and filling separately. For further information, click here.
- Historic Properties-if you purchase a historic home, you can apply for tax credits for preserving your property as well as rehabbing a property. For a list of programs, click here.
- For a list of many more tax relief programs, including tax deferral, abatement, lower-income and police benefits, click here.
Income Tax for anyone living in DC more then 183 days of the tax year: - First $10,000 = 4%
- $10,000-40,000 = $400 + 6% of excess above $10,000
- More than $40,000 = $2,200 + 8.5% of excess above $40,000
Northern Virginia:
The following taxes apply to all Virginia communities I cover:
Grantor’s Tax: - Seller pays $0.50 per $100 of sales price upon sale of property.
Income Tax:
- $720 + 5.75% of all income over $17,000.
Arlington:
Search Real Estate Assessments: Arlington Real Estate Assessments
Search Real Estate Sales Records: Registry of Deeds
Real Estate Assessment Appeal
Property Tax Rate:
- $0.818 per $100 of assessed value
Property Tax Relief: - If you are 65+ years old or disabled, you can apply to receive a tax deferral or exemption. To obtain information on Arlington’s Real Estate Tax Relief program, call the Department of Human Services at (703) 228-1350.
Alexandria: Search Assessments and Sales Records: Alexandria Real Estate Assessments
Request for a Review of Your Real Estate Assessment Search Assessments and Sales Records: for a Review of Your Real Estate Assessment
Property Tax Rate:
- $0.83 per $100 of assessed value
Property Tax Relief: If you are over 65 or disabled, here are the City’s tax relief income guidelines: For Tax Deferral: - Household combined income of less than $72,000
- Assets of household may not exceed $540,000 (excluding the house and up to 2 acres of adjoining property.)
Fairfax: Search Real Estate Assessments: Fairfax Real Estate Assessments
Fairfax Real Estate Assessment Appeal Application. Search Real Estate Assessments: Fairfax Real Estate Assessment Appeal Property Tax Rate: - $0.89 per $100 of assessed value
- Some areas of Fairfax have additional property tax. To search these areas, go to Special Tax Areas.
- Some Service Charges are also included in your taxes depending on your area.
Property Tax Relief: - If you are over 65 or disabled, here are the County’s tax relief guidelines:
· Combined Income of $52,000 or less-Full tax Exemption
· Combined Income of $52,001-62,000-Exemption of 50%
· Combined Income of $62,001-72,000-Exemption of 25%
· The total net assets of the owner(s) is less than $340,000. (Excluding the value of the home and up to one acre of land it rests on.)
Falls Church: Search Real Estate Assessments: Falls Church Real Estate Assessments
Appeal Real Estate Assessments
Property Tax Rate: - $1.01 per $100 of assessed value.
Property Tax Relief: - Falls Church gives tax relief to citizens over 65 years of age or disabled persons. For more information, click here.
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