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March 28, 2002 25 Percent Property Tax Cap Approved (Washington, DC) The District of Columbia Office of Tax and Revenue announced that legislation was recently approved providing for a 25 percent real property tax cap. This legislation means that where increases in assessments exceed 25 percent, the real property tax bill will show the credit applied against the tax due. This will limit the increase in tax due on large assessment increases. The net result is that the homeowner pays no property tax on the assessment increase that is above the 25 percent limit. The tax cap applies only to the principal residence of the property owner and does not limit the assessed value determined by the Office of Tax and Revenue. The 25 percent tax cap credit will be granted if the following conditions are met during the previous tax year: The property was not transferred to new ownership There was no change in the zoning classification requested by the homeowner, resulting in an increased value of the property The previous assessment was not clearly erroneous The dwelling is the owner's principal residence (an owner can receive a credit only on one property—the principal residence) The 25 percent tax cap credit will not be granted if: During the calendar year, new construction or rehabilitation occurred or there was a change in use, e.g., the house was converted to a commercial store. The property belongs to a cooperative housing association. Example: Assume that your old assessment was $100,000 and that your new assessment is $130,000. An increase of 25 percent would result in an assessment of $125,000. The difference between $130,000 and $125,000 is $5,000. The tax credit would apply to the taxes due on the $5,000. If the tax rate were $0.96 per $100 of assessed value, the tax credit would be $48 ($5000/100x0.96). Property owners may call the Office of Tax and Revenue Customer Service Administration at (202) 727-4TAX (727-4829) for more information.