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DC Property Tax Relief

12 Jan
D.C. Political Roundup: Bonds Fights for Property Tax Relief

Local journalists are excited about Anita Bond’s proposal to eliminate property taxes for persons over 65, who make less than $60,000.  It’s a good proposal and I support it, and more importantly, support making it larger, exempting more people from property taxes, especially low and moderate income people, and also dropping the age in Bond’s proposal to 62 or 60.  People who are trying to pay off mortgages or save for retirement just before they retire should also get this relief.

It’s hard though to view the proposal as something other than an appeal to 65+ voters, who are known to vote more heavily than many other groups, particularly in the local Democratic primary.  Especially since many of the people in this group already get property tax relief.

Here’s a summary of DC tax relief progams by the DCWatch blog:

TYPES OF DIRECT PROPERTY TAX RELIEF

It is fairly common for a single state to provide more than one type of property tax relief.(1) The District of Columbia is a case in point. Direct real property tax relief — excluding full exemptions for government, religious, educational, and such entities —includes:
  • Senior citizen tax reduction. Owners of class 1 property who are at least 65 years old, and who have under $100,000 in “annual household adjusted gross income” are eligible for a 50 percent reduction in real property tax liability [District Code, 47-863(b)]; an application is required every fifth year [District Code, 47-863(c)(2)]. 
  • Circuit breakers. The District extends residential property tax relief conditioned by income through credits against the personal income tax [District Code, 47-1806.6]. The basic characteristic is that the amount of relief declines as income rises, all else equal. In the District, renters may qualify for circuit breaker relief, with 15 percent of rent payments considered to be property tax. Two sets of credits are offered, one for persons of all ages, and a more generous one for those who are elderly (aged 62 or over), blind, or disabled;(2) the maximum income in each case is $20,000 and the maximum credit is $750.
  • Lower income homeownership tax abatement. The District provides a five-year, 100 percent tax abatement for first-time home buyers and selected organizations, to promote homeownership [District Code, 47-3501 through 47-3507].


So people over 65 who make under $100,000 already get a property tax break.

And new homebuyers with lower incomes (depending on family size) get a 5 year property tax abatement for the years immediately after purchase, as long as their income remains below a certain limit. Shouldn’t the property tax abatement for people who make barely enough to live in DC ($30,000 and less, $40,000 and less) be indefinite, and not last only 5 years?  Wouldn’t that be a more important form of tax relief, regardless of age?

And don’t all DC residents have a right to their own money? Shouldn’t they all get property tax rate cuts, so the DC government will have less money to waste on high salaries and pork projects?

DC Passes Record High Budget

7 Aug

The DC Council approved the highest budget ever: $12.1 billion Fiscal Year 2014 Budget. We are pleased to report that there are no new real estate specific taxes. Important changes REALTORS® should be aware of include–
  • The budget restores the out-of-state bonds tax break.
  • Funding will increase for low-income & senior housing, schools and public transportation.
DCAR vigilantly monitored the budget, and will continue to advocate for REALTOR® interests as the Tax Revision Commission moves forward.

New Bill Could Require Additional Disclosure

 

Councilmember Kenyan McDuffie (D – Ward 5) recently introduced the “Truth in Affordability Reporting Act of 2013

The District now evaluates housing affordability by the region’s Area Median Income (AMI).  The bill would change the procedure by requiring unit affordability to also measure against the District’s Median Family Income (DCMFI).

DCAR is working with Councilmember McDuffie’s office to ensure the legislation does not create additional burdens on your real estate transaction.   

Zoning Rewrite Update

DC’s Office of Planning  is working on the District’s first zoning code update in 55 years. After years  of delays, a proposal may go  before the Zoning Commission at the end of the month

The new regulations will preserve controversial mandatory parking minimums in transit zones for new residential and commercial developments.

DCAR recently hosted DDOT’s Associate Director Sam Zimbabwe and Policy Branch Manager Alice Kelly for its Speaker Series to discuss parking issues that are important to REALTORS®. DCAR will continue to monitor zoning, parking and transportation issues that affect REALTORS®.

‘Living Wage Bill’ in Mayor’s Hands

The Council approved a bill requiring large retailers to raise the employee minimum wage to $12.50 per hour. Mayor Vincent Gray is considering  whether to sign or veto the legislation. 

Retailers are important to the vitality and quality of life in the District. DCAR is working closely with business leaders to minimize the negative impact of this legislation on DC’s economic development.

Taxes Account For 45 Percent Of A Beer’s Cost

6 Jul

D.C., Md. push higher taxes, record spending

3 Feb

By Mark Lee on January 25, 2012 @ Washington Blade
Maryland and the District of Columbia are poised to continue spending at shockingly rising levels, exacerbating their reputations as high-tax and anti-business environments.
If approved, residents and local businesses alike will bear increasingly burdensome taxes and fees. Virginia continues to reap the benefits as the region’s sole business-friendly jurisdiction – almost by just sitting there and grinning from ear-to-ear.
In recent days Maryland Gov. Martin O’Malley roiled members of the state legislature and rankled the public by revealing that he planned to introduce a slew of new taxes and tax increases during the current legislative session in order to maintain the state’s runaway spending.
O’Malley’s budget proposal pumps up spending by 6 percent and an increase of $1 billion, largely on the backs of small business and the middle class. It has even resulted in a new term to reflect the proposed capping of income tax deductions and phasing out of personal and business deductions for the “thousandaires” earning more than only $100,000.
Included in a broad range of potential new taxes and fees is a 17% increase in the state sales tax. Also plopped on the table is a plan to shift some expenses to the county level, which will result in higher local tax levies, allowing the state government to dump this burden downwind and accommodate its freewheeling excesses.
These proposals would make a pickpocket proud. They also serve to further accelerate deterioration of the small business environment in the state, inhibiting job growth and a healthy state economy.
In D.C., after deluding the public that last year’s huge budget deficits would result in city spending cuts and resolve the District to eliminate inefficiencies and waste in government operations, the current city budget being doled out represents a new record level of spending.
Enabled by retaining a local sales tax increase which had been scheduled to sunset and increasing income taxes on a new top bracket of earners, as well as scheming up even more fee increases, the largess for this rampant spending required only another resident and consumer shakedown. Ultimately, these unrepentant big spenders are allocating what is yanked from the hands of local small businesses and enterprise owners, the overwhelming majority of whom report profits as personal income.
Now that D.C. CFO Natwar Gandhi has projected a more than $42 million surplus in the current fiscal year, Mayor Vincent Gray has already proposed spending all of it – plus a couple million dollars more to boot.
While many other states are smartly reducing spending, lowering taxes, implementing efficiencies, downsizing government, demanding that public employees contribute to generous benefit and pension plans, and otherwise putting their financial houses in order, the two kindred jurisdictions north of the Potomac are behaving as outliers from another era.
Evans announced last week that he plans to introduce legislation to lower the city’s sky-high corporate income tax from 9.975 percent to match Virginia’s six percent rate at a lower percentage than Maryland’s 8.25 percent levy, also eliminating the same tax rate for unincorporated businesses to match both neighboring states.D.C. Council member Jack Evans, representing the mid-city business area of Ward 2 since 1991 and chair of the Council’s Committee on Finance and Revenue, wants to put an end to such foolishness in the District.
He correctly posits that a more competitive business regulatory structure and a rolling back of the substantial disincentives and recent tax hikes will improve the District’s overall financial health and long-term business environment.
Last year the D.C. Council suddenly reversed course at the behest of Mayor Gray, hiking the top income tax rate to a fraction less than nine percent – falling heavily on local small businesses. This unexpected move further ensconced D.C. at the top of the tax scale for the entire country.
Evans sensibly wants to institute a progressive local income tax structure and lower rates across the board. This would provide both tax fairness for differing incomes and reduce the astounding local tax burden.
Of course, this would require city officials to put a stop to their ever more avaricious tax-and-spend habits. Perhaps a mayor and Council disfavored by ethical ill repute can be shamed into it. Let’s hope so.
Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.