DC Tax Abatement Program (Lower Income Homeownership Exemption)

At a glance

Amount

No DC property tax for five years, plus the deed is exempt from DC recordation and transfer taxes at closing

Type of help

Tax relief

Where

Washington, DC

Run by

DC Office of Tax and Revenue (OTR), Recorder of Deeds and Real Property Tax Administration

First-time buyer

Repeat buyers welcome

Income limit

Yes, see below

Price limit

Yes, see below

Homebuyer education

Not required

How the tax relief works

Lower or waived recordation, transfer, or property taxes.

• Monthly payment: None
• When you would repay: Nothing to repay. If your household stops qualifying, you must notify OTR in writing within 30 days and the abatement ends.

Who qualifies

• Repeat buyers welcome. First-time status is not required. Eligibility is based on household income, the purchase price, and living in the home.
• Income. Total income of everyone in the household, effective 2025-10-01 through the FY2026 tax year: $89,760 for 1 person, $102,540 for 2, $115,380 for 3, $128,160 for 4, $138,420 for 5, $148,680 for 6, $158,940 for 7, $169,200 for 8. Tenants paying fair market rent under a written lease are not counted. Higher limits apply inside designated Economic Development Zones. OTR publishes a new table each October 1.
• Price. Purchase price up to $576,000 (OTR Form ROD 9, effective 2025-10-01). OTR resets this each October 1.
• You must own the home in fee simple (or an eligible co-op or shared equity arrangement) and occupy it as your principal residence.
• Household income is measured against the table for the number of people in the household, using proof such as pay stubs, prior-year tax returns, and W-2s.
• Non-profit organizations, shared equity investors, cooperative housing associations, and community land trust land leases have their own eligibility rules under the same program.

How to apply

1. 1Before you write an offer, check the two thresholds: purchase price at or under $576,000 and household income under the limit for your household size. Tell your agent and title company you intend to claim the abatement.
2. 2Ask your title company to prepare the Lower Income/Shared Equity Homeownership Exemption application (OTR Form ROD 9 with the FP-420) for signature at settlement.
3. 3Gather proof of income for every household member: current pay stubs, prior-year federal return and W-2s, and Social Security or benefit statements if any. Self-employed buyers need a notarized profit and loss statement. Adults who are not working sign a notarized affidavit.
4. 4The title company files the application with the Recorder of Deeds when it records your deed, along with the settlement statement and sales contract. The recordation and transfer tax exemption is applied at that point.
5. 5OTR reviews the file and mails a notice with the dates your property goes non-taxable. The five years start on the October 1 after recording. Send a copy of the notice to your mortgage servicer so your escrow is adjusted.

Watch out for

• The application belongs at closing. OTR states the filing deadline for a given tax year is September 30, and the deed exemption cannot be claimed once the deed is recorded without it. Make sure the title company has it ready.
• The limits reset every October 1. A contract that straddles the fiscal year may face new income and price figures. Confirm the table that will apply on your recording date.
• The five years run on the tax calendar, not from your closing. A deed recorded in November starts its abatement the following October 1, so you pay roughly a year of taxes first.
• Income counts everyone living in the home, not just borrowers, except tenants under a written fair-market lease.
• You cannot combine this with the first-time homebuyer reduced recordation rate. The abatement exempts the recordation tax entirely, so if you qualify for both, the abatement is the larger benefit.
• If a lender or seller credit is tied to your closing costs, tell them the recordation tax is exempt so the credit is not wasted.
• You must notify OTR within 30 days if you stop qualifying, such as moving out. Selling ends the abatement for you; the next buyer applies on their own.

Straight answers

Sources

• OTR, Form ROD 9, Lower Income Homeownership Exemption Program FY2026 (income table and price cap effective October 1, 2025, PDF) (read Sep 23, 2026)
• OTR, ROD 9 Lower Income Homeownership Exemption Program FY2026 publication page (read Sep 23, 2026)
• OTR, Real Property Tax Reliefs, Credits, and Deductions (Lower Income Home Ownership Tax Abatement) (read Sep 23, 2026)

Program details are summarized from public sources and change without notice. Funding badges reflect the last time we checked, not a guarantee of availability. This is buyer education from a real estate agent, not a loan pre-approval or a commitment to lend. Eligibility is decided by each program administrator and your lender. Equal Housing Opportunity.