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Should D.C. Keep Its Transfer Taxes On The Table?

August 14, 2013  |  by Ellen

The Washington Business Journal reports that the D.C. Association of Realtors has put forth the request that D.C. eliminate the recordation and transfer taxes required for homes that sell over $400,000 since, “excessive recordation and transfer taxes that negatively impact housing purchases and economic development have no place in the District’s revenue stream. All these excessive taxes seem to do is reinforce a perception and precedent of the District haphazardly taxing anything that can generate revenue.”  

This was part of the written testimony submitted by Ed Krauze, CEO of the D.C. Association of Realtors, to the D.C. Tax Revision Commission. This group has been charged with the task of revising D.C.’s tax code and is expected to deliver their recommendations about four months from now. The recommendations will cut across nearly all sectors, not just real estate, but the proposal for eliminated the recordation and transfer fees is unlikely to pass.

Currently the rate is 1.45% for both the buyer and seller which earned the District almost $300 million dollars in revenue during fiscal year 2013. So that is hardly something the city can afford to lose. However, as Inman News points out, at least five states have successfully lobbied to do away with the tax (they are: Arizona, Missouri, Montana, Louisiana and Oregon).

We want to know your thoughts on the subject. Please let us know in the comments. 

To read the full Washington Business Journal article, click here.

Posted in Blog, Industry News, We Want to Know Wednesday

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6 responses to “Should D.C. Keep Its Transfer Taxes On The Table?”

  1. Tracy Pless says:

    Excellent idea. It will make housing more affordable for many people who just can't come up with the extra closing costs for the transfer taxes.

  2. A.J.Ginsburg says:

    Excuse me, but did anyone read and understand the article and the comments? "It will make housing more affordable for many people who cannot come up with the extra closing costs for transfer taxes". Did you notice that the article asked for the taxes to be removed for houses that sell in excess of $400,000? DC does not tax the first $400,000 as most agents know, or should know. The $300 million dollars in DC revenue would be replaced how; by adding more speed cameras; by taxing MD and VA residents? I support most efforts presented by my fellow agents, but sometimes the proposals simply do not make economic sence. Referencing Arizona, Missouri, Montana, Louisiana and Oregon as examples of states that have done away with the taxes. Arizona charges only $2.00 per deed to be recorded. Louisiana charges only local taxes. Missouri, Montana and Oregon have not recentltyy done away with trasfer taxes. They haven't been on the books for years. DC has had doubledigit growth for the last three months. Increasing demand will continue to drive prices up, not down, and combined with rising interest rates, that will make houses less affordable, not more affordable.

  3. Cindy Clemmer says:

    At the very least review and revise rates above and below $400k.

  4. d mitch says:

    A.J Ginsburg said that “DC does not tax the first $400,000 as most agents know, or should know.”

    Well call me ignorant because for years all my clients purchases below $400K have been and are being charged Transfer and Recordation taxes at the rate of 1.1%. Imagine how they will feel when I tell them that all agents know that DC doesn’t levy this tax on purchases under $400K !!!! Wonder if I’ll lose my license for incompetence!!!

  5. VIDA PETERS says:

    Tax insentive is what makes the public to want to buy or sell. Any way you cover it, it is an obstruct.. Gov. job is to acommodate incourage… these taxes only do the opposite.

  6. IRSMedic says:

    Great report. It talks about the issue that affect several people.

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