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Questions on the Reduced Recordation Tax for DC FTHB

I am an employee of an international organization, am exempt from paying US taxes and have some questions on the reduced Recordation Tax for DC FTHB.  Can I qualify for the DC First Time Home Buyer Recordation Tax Reduction benefit without providing my tax return?

For those individuals who wish to apply for the Reduced Recordation Tax Rate for First-Time Homebuyers, the Recorder of Deeds typically requires the last filed tax return to be submitted along with the application.  However, what if the buyer does not file US taxes?  Fortunately, DC will still provide the reduced recordation tax rate for First-Time Homebuyers who don’t pay taxes.

What does DC require in place of a tax return?

In this scenario, the Recorder of Deeds will require a letter from the employer stating that the buyer is not required to file income taxes in the United States pursuant to the International Organization Immunities Act (IOIA).   In accordance with this Act, non-US employees of certain international organizations are not subject to U.S. income taxes on their earnings and as such are not required to file US taxes.

How much is the Reduced Recordation Tax Rate benefit?

Under the reduction benefit, the recordation tax paid at settlement is reduced from 1.1% or 1.45% (depending on the sales price) to 0725%.

Will the title company submit the application?

As part of settlement, Federal Title & Escrow will collect and submit all of the required application materials to DC for final approval.

Further questions?

Feel free to reach out to one of our attorneys if you have any questions about the DC First Time Home Buyer program and/or if your buyer has a unique situation.

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