Things to do in Washington DC: August 2012

DC Tax Abatement program can help a first time home buyer buy a home

DC Tax Abatement program can help a first time home buyer buy a home.

This is one of many programs that I am going to be blogging about for first time home buyers. This a program designed by the District of Columbia to help lower income homeowners purchase property. Now if you qualify for the program,you are exempt from paying transfer and recordation taxes. What does this mean? This means that you are not only exempt from paying the 1.1% (of the purchase price) recordation tax: but customarily, the seller's 1.1% (of the purchase price) transfer tax is credited to you settlement instead of being credited to the District Government. So you are saving 2.2% off of your closing costs. You will also be exempt from paying real property taxes for 5 years beginning the next full tax year (October-September)

 

How do you qualify for the DC Tax Abatement program? The purchase price for the property must be $356,000 or less.  And here are the household income limits.

Person in household                                    Household income limits

 

      1                                                                   $56,820

      2                                                                   $64,920    

      3                                                                   $73,020

      4                                                                   $81,820

      5                                                                   $87,660

      6                                                                   $94,140

      7                                                                   $100,620

      8                                                                   $107,100

 

The property that you are purchasing must be a principal residence and the purchaser must be domiciled in the District of Columbia. Domiciled in District of Columbia means you must get a DC government issued ID such as a Driver's license,register to vote in DC and file personal income taxes. You also must have your last two years income taxes,two W-2s and last two paystubs. Now if you have some gaps in your employment or you are self-employed,the District of Columbia may require additional documentation from you before approving the abatement application.

 

 

The settlement agent files the required documents with the deed after closing. The DC Recorder of Deeds looks at all sources of income,not just taxable income. The settlement company handling your closing will know immediately,because your deed will go on record without transfer and recordation taxes. You will also receive a letter from the District of Columbia confirming that you are qualified for the tax abatement and list the years you will be exempt from propety taxes. The form you have to fill out is the ROD*9 Form called Lower Income/Shared Equity Home Ownership Exemption Application and Claim for Exemption from Real Property Recordation and Transfer Tax. Not sure if this applies to Co-op. Just called a Title company in DC that handles Co-op. As soon as I get an answer,I will update this blog.

 

Also I want to add that the DC Tax Abatement also applies to non-profit organizations and shared equity investors.

 

 

 

 

 

 

Click here to Receive up to $15,000 from government programs that would assist you in down payment and closing cost fees when you buy your house                                                                          

Want to search houses for sale in Washington DC,Maryland and/or Virginia? Click here

 

Want to know how much houses are selling for in your area? Click here 

 

Click on this link to download my KW Mobile App to search homes for sale on your mobile phone,IPAD or tablet http://app.kw.com/KW2GQDDCJ

 

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Comment balloon 1 commentLanre-"THE REAL ESTATE FARMER" Folayan • August 30 2012 04:17PM
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