Though less complicated than Maryland, DC recordation taxes (a.k.a. transfer taxes) are two-tiered. Buy a house for under $400,000 and you pay roughly 1.1%. At $400,000 and above the rate jumps to 1.45%. Each. Buyers and Sellers both have the privilege of paying this tax.*
So, if you are buying a house in the District for $350,000 the math works like so: $350,000 x 1.1% = $3,500. Both the buyer and seller will pay $3,500 for a total of $7,000 going to DC.
If you are purchasing something for $600,000, the math works like so: $600,000 x 1.45% = $8,700. Both sides pay the tax, with a total of $17,400 paid to DC.
Big difference. If you’re looking to purchase property right around $400,000, try to keep it just under the $400K mark. It’ll save you @ $1,400.
For certain borrowers whose income allows it, there are tax abatement programs in DC that can save some big bucks. Federal Title does a good job of explaining it, so click here for more details.
Now, to actually record the deeds you’ll pay about $7 a page. It averages about $300 for most transactions.
*The District of Columbia charges no transfer or recordation tax on the refinance of a property which has four or less units. If the property has five or more units, D.C. charges full recordation and transfer taxes on the mortgage or deed of trust amount.
Click here if you’re curious about transfer & recordation charges in Montgomery County, MD.
Happy house hunting!