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Public Property Records

• DC Records - Find out what your neighbors paid for their property.
• DC Assessments - Find out the tax assessed value of any property
• Maryland Dept. of Assessments and Taxation
• Montgomery County, MD Property tax records
• Alexandria, VA - Property Records

Tax on Purchases

Mortgage interest deduction: As a homeowner, you are entitled to deduct from your income the points and interest paid to your lender on your home.

The DC Government's 2003 study on the comparative tax rates and tax burdens in Washington D.C. and 5 surrounding counties found that a D.C. resident with an income of $50,000 would have the 4th highest overall tax burden, and a D.C. resident with an income of $150,000 would have the 2nd highest tax burden (11.0%). Arlington County has the lowest overall rate (9.1%). Comparative Tax Rates and Burdens Analysis.

Tax	Washington D.C.	Maryland	Virginia
Transfer & Recordation (One-time at closing)	Transfer tax: 1.1% paid by seller at closing. Recordation tax: 1.1% paid by purchaser at closing. If purchase price is below $250,000 this tax may be waived, see below for credits.	Transfer tax: County: 0.5% paid by seller & 0.5% paid by buyer at closing. State:0.25% paid by seller & 0.25% paid by buyer at closing. Exempt for first time buyer. Recordation tax: Montgomery: 0.345% paid by seller & 0.345% paid by buyer at closing.  0.69% of (purchase price - $50,000)	Transfer tax: State:$1 per $1000 paid by seller at closing.   Recordation tax: $0.15 per $100, paid by buyer County: 1/3 of State, paid by buyer
Property (Annual)	Tax rate as a percentage of assessed value: Residential: 0.96%1 Commercial 1.85% Vacant Residential: 5.0%2 DC Office of Tax & Revenue	State: 0.84% of value County Taxes: Charles: 1.1% Montgomery: 0.838% P.G.: 0.962%	State: no tax Arlington:  0.978% Alexandria:  1.08%
Property Credits	First-Time Homebuyer Tax Credit: One time tax credit of up to $5,000 against federal income taxes if you purchased a "main home" in DC during the tax year and did not own a home in DC during the previous 1 year period. Credit starts to phase out at: $70,000 for single filers, and $110,000 for joint filers. Taxpayer must submit federal form 8859 to claim the credit. See IRS website for details. DC government website Homestead Credit This credit reduces the tax assessed value of a home by $38,000, provided the home is the principal residence of the owner. DC government website Homebuyer Tax Abatement Program Property tax is waived for 5 years and owner is exempted from paying the 1.1% recordation taxes if the home purchase price does not exceed $250,000, and if the household income does not exceed: $47,460 for 1 resident $54,240 for 2 $61,020 for 3 $67,800 for 4 Additionally, the purchaser receives 1.1% of the purchase price from the seller as a credit toward closing costs. Need an explanation?  Call us, we can tell you how you qualify. DC government website	First time homebuyer A portion of the sales tax is waived if the purchaser has not owned a home in Montgomery County.	Arlington: Partial property tax exemption for senior citizens and disabled residents.  Click here for details.
Income	First $10,000 at 5% $10,000 to $30,000 at 7.5% Over $30,000 at 9.3% Exemption: $1,370 per person Tax Practitioner Service Center	State: 4.75% Exemption: $2400 per person Counties: Montgomery: 2.95% P.G.: 3.10% Frederick: 2.96%	State:  $720 + 5.75% of income over $17,000 Exemption: $700 per person
Personal Property			Arlington: $4.40 per $100

1. Residential rate increases - Under D.C. law, increases in the assessed value of a home are limited to 12% per year.  See website for details.
2. Vacant Residential Property.  The DC government recently passed legislation imposing an annual 5% tax rate on vacant and abandoned residential ("Class 3") real property.  To report vacant property, print out a DC Vacant Home Report and mail as directed.

Tax Exchange 

Tax-Free (1031) Exchanges

Considering selling an investment property? Under ordinary circumstances, capital gains tax will apply to gain realized from the sale of real property. Investors who reinvest in other property, however, may coordinate the purchase of the new property with the sale of the old property under Section 1031 of the Internal Revenue Code to avoid paying tax on the sale. The regulations demand careful adherence to retain the tax-free nature of the transaction, and require the investor to purchase the new or replacement property within specified time limits and obtain the services of an intermediary to properly qualify the exchange. Though exacting, the rules permit owners of investment property to down-size, diversify, upgrade, change the location of their investment, or consolidate numerous other properties, without taxation on the gain from the sale of the relinquished property. Tax is deferred until the new property is sold, and may be avoided altogether if the replacement property is transferred at probate. Read a more detailed explanation of the rules, visit the IRS website for tax-free exchanges, or contact a tax attorney for further details.

A typical tax deferred exchange is very similar to a taxable sale transaction except that prior to closing on the property being sold, the "Qualified Intermediary" is assigned into the Sale Contract and instructs the closer to transfer the Exchanger's property to the buyer via direct deeding. The exchange proceeds (equity) are deposited into a separate exchange account to comply with the exchange requirement that the Exchanger is not in actual or constructive receipt of the funds at any time during the exchange. The exchange period begins with the transfer of the first property and allows the Exchanger 45 days to identify property and a total of 180 days to close on "like-kind" replacement property. The exchange is completed when the "Qualified Intermediary" is assigned into the Purchase Contract, uses the exchange proceeds to acquire the replacement property and instructs the closer to transfer ownership from the seller to the Exchanger via direct deeding.

 'COOPERATION CLAUSE' IN SALE CONTRACT

Sample Cooperation Clause for the Sales Contract

 Buyer hereby acknowledges it is the intent of the Seller to effect an IRC §1031 tax deferred exchange, which will not delay the closing or cause additional expense to the Buyer. The Seller's rights under this agreement may be assigned to _____(name of your qualified intermediary)______, a Qualified Intermediary, for the purpose of completing such an exchange. Buyer agrees to cooperate with the 'Seller and _____(name of your qualified intermediary)______ in a manner necessary to complete the exchange.