DC First-Time Homebuyer Benefit
Recordation Tax Reductions for DC First-Time Homebuyers
First-time DC homebuyers who qualify pay less in taxes at closing — a reduced recordation tax rate of just 0.725%.
How to Qualify
District of Columbia lawmakers created this benefit to reduce the tax burden for qualifying first-time homebuyers. Under this program, the recordation tax at settlement for houses and condos drops to 0.725%. Seller transfer taxes remain at 1.1% or 1.45% based on sales price — the entire benefit goes to qualifying buyers.
The title company files an application with the DC Office of Tax and Revenue at closing. Applicants must provide documentation proving they meet property requirements, household income limits, and DC first-time homebuyer criteria.
Information updated April 14, 2025. Not guaranteed.
Property Eligibility
Maximum sales price: $777,000.The property must qualify for DC's Homestead Deduction. Properties that fail to qualify for the Homestead Deduction will not receive the reduced recordation rate, and additional tax may apply.
Household Income Limits
All deed grantees plus occupying residents must provide their prior-year Form 1040 U.S. Individual Tax Return. Tenants under separate leases and those under 18 years of age do not count toward income limits.
| Household Members | Income Limit |
|---|---|
| 1 | $206,640 |
| 2 | $236,160 |
| 3 | $265,680 |
| 4 | $295,020 |
| 5 | $318,780 |
| 6 | $342,360 |
| 7 | $365,940 |
| 8 | $389,520 |
Required Documentation
- Settlement Statement or Closing Disclosure copy
- DC Homestead Deduction application copy
- Each applicant's complete U.S. Individual Income Tax Return (Form 1040) from immediately before closing
- Additional documentation if applicant previously owned DC property with an ex-spouse (now divorced or separated)
- Audit materials if required by the Recorder of Deeds
Frequently Asked Questions
What is the definition of a DC first-time homebuyer?
A “DC first-time homebuyer” is someone who has never owned eligible property as their principal residence. This includes individuals who were divorced or separated and did not obtain an ownership interest in a previously joint-owned principal residence through a settlement agreement or court order. All deed grantees must be first-time District homebuyers.
Is there a residency requirement?
Applicants must be domiciled in DC or have immediate plans to reside there upon closing.
Can the seller share in the tax reduction?
No. The entire tax reduction benefit must go to qualifying homebuyers on the deed. Sellers pay their full transfer tax.
I previously owned DC property jointly with my ex-spouse. Can I still qualify?
Possibly. If prior DC ownership was joint only with an ex-spouse, you may still qualify. Submit a written separation agreement or court order showing you relinquished ownership to the ex-spouse.
See Your Full Savings Picture
Federal Title files the reduced recordation tax application on your behalf at closing. Get a guaranteed quote to see exactly what you'll pay.