There are many helpful programs that DC offers for residents in these income brackets, but one I really love is the DC Tax Abatement Program.
For those who qualify for this program, you will not pay property taxes for five years and you’ll face no recordation tax at settlement. That really helps with lowering your monthly payments, making buying a home much more affordable!
In addition to that great benefit, part of your closing costs is waived at settlement. So, you owe even less at settlement for your purchase. Remember, this is all legal!
What are the requirements?
In order to qualify for this program, you will need to meet several conditions. These conditions change often, so please refer to the DC website for more information, but here are some examples:
- Household income restrictions – a 1-person household can’t have more than a max gross income of $57,120; a 2-person household with no more than $65,280; 3-person household with no more than $73,440, a 4-person household with no more than $80,600, and so on.
- Income for every adult 18+ and older living in the home must be included in the application.
- The purchase price of the home must be $408,000 or less.
- The home must be your principal residence.
- You must prove you are “domiciled” in DC — Obtain a DC driver’s license, register to vote in DC, file DC personal income taxes. You can do this after the purchase.
How is it done?
At settlement, the title company will file the required documents with the deed after your closing. It’s that simple and they can even follow-up for you to find out if you are approved before you are notified by mail.
To apply, you’ll need the DC Tax Abatement application (FP-420); a copy of the Closing Disclosure; a copy of the sales contract; the previous year’s W-2s; and proof of annual household income (current pay stubs, employment letters, Social Security statements, public assistance statements, retirement allotment and unemployment compensation).
If you’re self-employed, you must provide a notarized Profit and Loss Statement, under penalty of perjury, for current income and previous year’s income tax returns.
Let me know if you have any questions for the DC Tax Abatement Program and how to qualify. I can walk you through so you can take advantage of this great program every step of the way.