This guide covers DC residential property tax from assessment to payment: the 2026 rate, the homestead deduction, the 10% assessment cap, appeals, and escrow.
DC residential property tax rate
DC's residential property tax rate for 2026 is $0.85 per $100 of assessed value (0.85%). This rate applies to the first $2.558 million of assessed value; above that, the rate is $1.00 per $100 (DC OTR, Class 1 rates).
DC homestead deduction
DC's homestead deduction is the main property tax benefit for owner-occupants. The deduction reduces your property's assessed value by $91,950 for tax year 2026 before the tax is calculated. The figure changes, so check the current one with the Office of Tax and Revenue.
Annual tax with and without the homestead deduction
| Assessed Value | Without Homestead | With Homestead | Tax Reduction |
|---|---|---|---|
| $400,000 | $3,400 | $2,618 | $782 |
| $500,000 | $4,250 | $3,468 | $782 |
| $600,000 | $5,100 | $4,318 | $782 |
| $800,000 | $6,800 | $6,018 | $782 |
The reduction is the same at any assessed value under $2.558 million: $782 a year (0.85% × $91,950, tax year 2026).
How to apply for the homestead deduction
- Apply through the DC Office of Tax and Revenue (OTR) website
- File any time: if OTR approves it between October 1 and March 31 you get the full tax year; approval between April 1 and September 30 applies from the second-half bill (D.C. Code § 47-850)
- There is no filing deadline, but you get no refund for years you didn't apply
- Not automatic — you must apply
- One homestead per person; must be your primary residence
Apply the week you close
The deduction is not automatic, and OTR gives no refund for half-years before you applied. Apply the week you close; each half-year you wait is a half-year without the deduction, and OTR will not refund it.
How DC assesses property value
The DC Office of Tax and Revenue (OTR) assesses all properties annually. Assessed values are based on:
- Recent comparable sales in your area
- Property characteristics (size, age, condition, lot size)
- Market conditions as of January 1 of the tax year
10% assessment cap
DC limits annual assessment increases to 10% for owner-occupied properties with the homestead deduction. If your home's market value jumped 20% in one year, your assessed value can only increase by 10%.
Note: The cap resets when the property sells. New buyers are assessed at the current market value.
DC assessment timeline
- January 1: Valuation date (assessments reflect market as of this date)
- March: Proposed assessments published
- April 1: Deadline to appeal proposed assessments
- October 1: Tax year begins (DC's fiscal year runs Oct 1 - Sept 30)
How to appeal a DC property tax assessment
Three levels of appeal are open if your assessment is too high:
First level: OTR administrative review
- File by April 1 (deadline for the upcoming tax year)
- Submit comparable sales data showing lower values
- No cost to file
- If OTR has not mailed its decision by August 1, you can go straight to the Commission by September 30 (D.C. Code § 47-825.01a)
Second level: Real Property Tax Appeals Commission (RPTAC)
- If you disagree with the OTR review result (D.C. Code § 47-825.01a; rptac.dc.gov)
- More formal process with a hearing
- Can submit additional evidence
- Still no cost to file
Third level: DC Superior Court
- Available only after you have exhausted the RPTAC appeal
Reasons to appeal an assessment
Appeal if:
- Your assessment increased more than assessments on comparable properties
- Comparable homes sold for less than your assessed value
- Your property has condition issues not reflected in the assessment
- An error exists (wrong square footage, lot size, or property characteristics)
Evidence for an appeal
- Recent sales of comparable properties (same size, age, neighborhood)
- Photos of condition issues affecting value
- Professional appraisal (if you recently refinanced or purchased)
- Any documentation of problems (structural issues, needed repairs)
How property tax affects your mortgage
Escrow account
FHA loans require an escrow account for property taxes and insurance. On a conventional loan with less than 20% down, ask your lender whether escrow is required. With escrow, instead of paying taxes directly, you pay 1/12 of the annual amount each month as part of your mortgage payment.
Example: $4,000 annual property tax = $333/month added to your mortgage payment.
Annual escrow analysis
Your lender reviews the escrow account annually. If taxes increase, your monthly payment increases to cover the difference. If taxes decrease, your payment may decrease (or you'll receive a refund).
How property tax affects the loan amount you qualify for
Lenders include property taxes in your DTI calculation. Higher taxes reduce the loan amount you qualify for.
Example: A property with $300 more per month in taxes than another supports a loan tens of thousands of dollars smaller at the same income. Run two properties through the calculator to see the difference.
Federal tax benefits of owning a DC home
Mortgage interest deduction
Deduct interest on up to $750,000 of mortgage debt on your federal taxes. Interest is front-loaded in an amortizing loan, so the deduction is largest in the early years of the mortgage.
Property tax deduction (SALT cap)
For 2026 the federal SALT cap is $40,400 (phasing down for incomes above about $505,000, and scheduled to fall back to $10,000 in 2030 under P.L. 119-21). DC property taxes count toward it.
Capital gains exclusion
When you sell your primary residence, you can exclude up to $250,000 (single) or $500,000 (married) of capital gains from federal taxes, provided you've lived there for at least 2 of the past 5 years.
Property tax for seniors, new construction, and rentals
Senior and disabled owners
DC offers additional property tax relief:
- Senior/disabled 50% tax reduction: owners 65+ (or permanently disabled) who own at least half the property and whose household federal AGI is under $163,500 for tax year 2026 pay half the tax (D.C. Code § 47-863)
New construction
If you buy a new condo, your first full assessment will be based on the purchase price.
Rental property
Rentals are taxed at the same Class 1 rate but get neither the $91,950 homestead deduction (tax year 2026) nor the 10% assessment cap. On a $500,000 condo that is about $782 more tax per year, and more where the cap had been holding the taxable value down.
Property tax steps for DC homeowners
- Apply for the homestead deduction the week you close: the deduction lowers the tax by $782 a year
- Budget for taxes on the full assessed value: the cap resets on sale, so a previous owner's capped assessment does not carry over
- Review your proposed assessment each March and appeal by April 1 if it is too high
- Expect your mortgage payment to change as property taxes adjust annually
- Include property taxes when you compare homes: they affect your monthly payment and qualification amount
See the DC mortgage guide or get pre-qualified: two minutes, no credit pull.