§ 47–903. Imposition of tax; rate; returns; liability for tax.

(a)(1) There is imposed on the transferor for each transfer at the time the deed is submitted to the Mayor for recordation a tax at the rate of 1.1% of the consideration paid for the transfer; provided, that:

(A) If the interest in real property transferred is a lease or ground rent for a term (including renewals) that is at least 30 years, the transfer tax will be computed using the value determined in accordance with paragraphs (2) or (3) of this subsection; and

(B) If there is no consideration for a transfer or the consideration is nominal, the rate shall be applied to the fair market value of the real property covered by the interest transferred as determined by the Mayor.

(2) If there is a lease or ground rent for a term (including renewals) that is at least 30 years, the transfer tax shall be based upon the average annual rent over the term of the lease, including renewals, capitalized at a rate of 10%, plus any additional actual consideration payable; provided, that the amount to which the rate is applied shall not exceed the fair market value of the real property covered by the interest transferred.

(3) If the average annual rent of the lease or ground rent for a term (including renewals) that is at least 30 years cannot be determined, the transfer tax will be based on the greater of:

(A) One hundred and five percent of the minimum average annual rent ascertainable from the terms of the lease, capitalized at a rate of 10%, plus any additional consideration payable; or

(B) One hundred and fifty percent of the assessed value of the property covered by the interest transferred.

(a-1) Repealed.

(a-2) Repealed.

(a-3) Repealed.

(a-4) Beginning October 1, 2006, except for residential properties transferred for a consideration less than $400,000, an additional tax of .35% is imposed upon a deed that is subject to the tax under subsection (a)(1) or (3) of this section.

(a-5) [Repealed].

(a-6)(1) Beginning October 1, 2019, an additional tax of 1.05%, in addition to the additional tax imposed by subsection (a-4) of this section, is imposed upon a deed that is subject to the tax under subsection (a)(1) of this section if:

(A) The deed transfers real property (or an interest in real property) any part of which is classified as Class 2 Property under § 47-813; and

(B) The taxed or imputed consideration for such deed is $2 million or more.

(2) For the purposes of this subsection, a deed shall be considered to transfer Class 2 Property if any portion of the building or structure in which the real property (or interest in real property) being transferred by the deed is located is classified as Class 2 Property, regardless of whether that portion is transferred in the deed, if, prior to execution of the deed, the majority ownership of the real property (or interest in real property) being transferred by the deed and a portion of the building or structure that is classified as Class 2 Property was common (whether direct or indirect); provided, that this paragraph shall not apply to a deed solely transferring real property for which the homestead deduction is applied for under § 47-850, if the homestead deduction is applied for simultaneously with the recordation of the deed and the deduction is granted or to an accessory lot included within the deed.

(b)(1) Each such deed shall be accompanied by a return in such form as the Mayor may prescribe, executed by all parties to the deed, setting forth the consideration for the deed or debt secured by the deed, and such other information as the Mayor may require.

(2) The return shall be an integral part of the deed when prescribed and as required by regulation.

(3) The return shall not be confidential or subject to the provisions of §§ 47-1805.04 and 47-4406, unless otherwise provided by regulation.

(c) The transferor in a transfer shall have responsibility for payment of the taxes imposed by this section; provided, however, that if the transferor should fail to make payment the transferee shall be jointly and severally liable with the transferor for payment of said taxes. Notwithstanding the foregoing, the United States or the District governments shall not be jointly and severally liable with the transferor.

(d) The deed and accompanying return shall be due as prescribed in § 47-1431(a) for the recordation of a deed; provided, that if the deed and return are submitted to the Recorder of Deeds before the due date, the return shall be due and taxes shall be due and owing at the time of submission.

(e) Notwithstanding any other provision of this title, the denial of an exemption applied for under authority of § 47-902 shall be subject to the same notice and appeal provisions and procedures as set forth under § 47-1009 relating to the denial of a real property tax exemption applied for under authority of § 47-1002.

(f) Funds collected under this section shall be deposited pursuant to § 47-919.

(Sept. 13, 1980, D.C. Law 3-92, § 403, 27 DCR 3390; July 25, 1989, D.C. Law 8-17, § 9, 36 DCR 4160; Apr. 9, 1997, D.C. Law 11-198, § 102, 43 DCR 4569; Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; Apr. 9, 1997, D.C. Law 11-255, § 59, 44 DCR 1271; June 9, 2001, D.C. Law 13-305, § 505(c), 48 DCR 334; Oct. 26, 2001, D.C. Law 14-42, § 10(e), 48 DCR 7612; Apr. 4, 2003, D.C. Law 14-282, § 11(p), 50 DCR 896; June 5, 2003, D.C. Law 14-307, § 1103, 49 DCR 11664; Mar. 13, 2004, D.C. Law 15-105, §§ 26(c)(4), 82, 51 DCR 881; Dec. 7, 2004, D.C. Law 15-205, § 1233(b), 51 DCR 8441; June 8, 2006, D.C. Law 16-123, § 161(b), 53 DCR 2843; Mar. 2, 2007, D.C. Law 16-192, §§ 1132(b), 2054, 53 DCR 6899; Aug. 16, 2008, D.C. Law 17-219, § 2003(b), 55 DCR 7598; Mar. 25, 2009, D.C. Law 17-353, § 135, 56 DCR 1117; Mar. 3, 2010, D.C. Law 18-111, § 1241, 57 DCR 181; Sept. 26, 2012, D.C. Law 19-171, § 114(b), 59 DCR 6190; Oct. 22, 2015, D.C. Law 21-36, § 7232, 62 DCR 10905; Sept. 11, 2019, D.C. Law 23-16, § 7023, 66 DCR 8621; Sept. 6, 2023, D.C. Law 25-50, § 2183(a), 70 DCR 10366.)

Prior Codifications

1981 Ed., § 47-903.

Section References

This section is referenced in § 29-204.06, § 42-202, § 42-2802, § 42-2812.01, § 47-864, § 47-895.32, § 47-1081, § 47-1085, § 47-1088, § 47-1090, § 47-1092, § 47-4406, § 47-4603, § 47-4605, § 47-4607, § 47-4608, § 47-4609, § 47-4614, § 47-4620, § 47-4634, § 47-4639, and § 47-4651.

Effect of Amendments

D.C. Law 13-305 rewrote the section which had read:

“(a) There is imposed on each transferor for each transfer at the time the deed is submitted to the Mayor for recordation a tax at the rate of 1.1% of the consideration for such transfer; provided, that in any case where application of the rate of tax to the consideration for the transfer results in a total tax of less than $1 the tax shall be $1.

“(b) Each such deed shall be accompanied by a return, under oath, in such form as the Mayor may prescribe, executed by all the parties to the deed, setting forth the consideration for the deed, the amount of tax payable, and such other information as the Mayor may require.

“(c) The transferor in a transfer shall have responsibility for payment of the taxes imposed by this section; provided, however, that if the transferor should fail to make payment the transferee shall be jointly and severally liable with the transferor for payment of said taxes. Neither the United States nor the District of Columbia governments shall be subject to liability for the tax imposed under this section.

“(d) The Mayor is authorized to prescribe, by regulation, reasonable extensions of time for the filing of the return required by subsection (b) of this section.”

D.C. Law 14-42, in subsec. (a)(2), substituted “based upon the average annual rent over the term of the lease, including renewals, capitalized at a rate of 10%” for “based on the capitalization of 10% of the average annual rent over the term of the lease, including renewals”; in subsec. (a)(3)(B), substituted “One hundred and fifty” for “One and one-half”; and in subsec. (c), substituted “provided, further” for “provided further”.

D.C. Law 14-282 rewrote subsec. (b); in subsec. (c), substituted “Notwithstanding the foregoing, the United States or the District governments shall not be jointly and severally liable with the transferor.” for “Neither the United States nor the District of Columbia governments shall be subject to liability for the tax imposed under this section.”; rewrote subsec. (d); and added subsec. (e).

D.C. Law 14-307, in subsec. (a)(1), substituted “1.5” for “1.1” and deleted the word “total” following “consideration”; and added subsecs. (a-1) and (a-2).

D.C. Law 15-105, in subsec. (a)(2), validated a previously made technical correction; and, in subsec. (a-2), substituted “§ 47-368.03” for “§ 47-143”.

D.C. Law 15-205, in par. (1) of subsec. (a), substituted “1.1%” for “1.5%”; and repealed subsecs. (a-1) and (a-2).

D.C. Law 16-123 added subsec. (a-3).

D.C. Law 16-192 repealed subsec. (a-3) as added by D.C. Law 16-123 and added a new subsec. (a-4). Subsec. (a-3) as added by D.C. Law 16-123 read as follows: “(a-3) Beginning for fiscal year 2008, if the amount of revenue necessary to fund Chapter 29B of Title 38, in accordance with § 38-2972.01(a)(1) and (2) thereof is not sufficient, the tax imposed on commercial property by subsection (a) of this section shall be increased to rates, as determined annually by the Chief Financial Officer, rounded to the highest increment of 0.1%, sufficient to raise revenue in an amount needed to satisfy the deficiency in the fiscal year, subject to Council approval. After publishing the August revised revenue estimates and prior to September 1 of each year, the Chief Financial Officer shall determine the rates and publish a notice in the District of Columbia Register and on the website of the Office of the Chief Financial Officer stating the amount of the rates. The rates as determined by Chief Financial Officer shall be effective as of October 1 of the following fiscal year.”

D.C. Law 17-219 rewrote subsec. (a-4), which had read as follows: “(a-4) Beginning October 1, 2006, except for residential properties transferred for a consideration less than $400,000, an additional tax of .35% is imposed upon a deed that is subject to the tax under subsection (a)(1) of this section. An amount equal to 39.93% of the funds collected under this subsection shall be deposited in the Mayor’s Comprehensive Housing Task Force Fund established by § 42-2855.01, 15% of the funds collected shall be deposited in the Housing Production Trust Fund established by § 42-2802, and the balance shall be deposited in the General Fund of the District of Columbia.”

D.C. Law 17-353 validated a previously made technical correction in the designation of subsec. (a-4).

D.C. Law 18-111 added subsec. (a-5).

The 2012 amendment by D.C. Law 19-171 validated a previously made technical correction in (a-5).

The 2015 amendment by D.C. Law 21-36 repealed (a-5).

Cross References

Conservation easements, real property transfer tax exemption, see § 42-202.

Limited liability companies, conversion of partnership to limited liability company, real property transfer tax exemption, see § 29-1013.

Expiration of Law

Section 7024 of D.C. Law 23-16 provided that the changes to this section made by section 7023 of D.C. Law 23-16 shall expire on September 30, 2023.

Emergency Legislation

For temporary (90 days) amendment of this section, see § 7023 of Fiscal Year 2020 Budget Support Congressional Review Emergency Act of 2019 (D.C. Act 23-112, Sept. 4, 2019, 66 DCR 11964).

For temporary (90 days) amendment of this section, see § 7023 of Fiscal Year 2020 Budget Support Emergency Act of 2019 (D.C. Act 23-91, July 22, 2019, 66 DCR 8497).

For temporary (90 day) amendment of section, see § 5(c) of Real Property Tax Clarity and Litter Control Administration Emergency Act of 2001 (D.C. Act 14-22, March 16, 2001, 48 DCR 2706).

For temporary (90 day) amendment of section, see § 10(e) of Technical Amendments Emergency Act of 2001 (D.C. Act 14-108, August 3, 2001, 48 DCR 7622).

For temporary (90 day) amendment of section, see §§ 1103 and 1104 of Fiscal Year 2003 Budget Support Amendment Emergency Act of 2002 (D.C. Act 14-544, December 4, 2002, 49 DCR 11700).

For temporary (90 day) amendment of section, see §§ 1103 and 1104 of the Fiscal Year 2003 Budget Support Amendment Congressional Review Emergency Act of 2003 (D.C. Act 15-27, February 24, 2003, 50 DCR 2151).

For temporary (90 day) amendment of section, see § 12(p) of Tax Clarity and Recorder of Deeds Emergency Act of 2002 (D.C. Act 14-381, June 6, 2002, 49 DCR 5674).

For temporary (90 day) amendment of section, see § 12(p) of Tax Clarity and Related Amendments Emergency Act of 2002 (D.C. Act 14-456, July 23, 2002, 49 DCR 8107).

For temporary (90 day) amendment of section, see § 12(p) of Tax Clarity and Related Amendments Congressional Review Emergency Act of 2002 (D.C. Act 14-510, October 23, 2002, 49 DCR 10247).

For temporary (90 day) amendment of section, see § 1103 of Fiscal Year 2003 Budget Support Amendment Second Congressional Review Emergency Act of 2003 (D.C. Act 15-103, June 20, 2003, 50 DCR 5499).

For temporary (90 day) amendment of section, see § 1233(b) of Fiscal Year 2005 Budget Support Emergency Act of 2004 (D.C. Act 15-486, August 2, 2004, 51 DCR 8236).

For temporary (90 day) amendment of section, see § 1233(b) of Fiscal Year 2005 Budget Support Congressional Review Emergency Act of 2004 (D.C. Act 15-594, October 26, 2004, 51 DCR 11725).

For temporary (90 day) amendment of section, see §§ 1132(b), 2054 of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068).

For temporary (90 day) amendment of section, see §§ 1132(b), 2054 of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845).

For temporary (90 day) amendment of section, see §§ 1132(b), 2054, of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165).

For temporary (90 day) amendment of section, see § 1241 of Fiscal Year 2010 Budget Support Second Emergency Act of 2009 (D.C. Act 18-207, October 15, 2009, 56 DCR 8234).

For temporary (90 day) amendment of section, see § 1241 of Fiscal Year Budget Support Congressional Review Emergency Amendment Act of 2009 (D.C. Act 18-260, January 4, 2010, 57 DCR 345).

For temporary (90 days) amendment of this section, see § 7202 of the Fiscal Year 2016 Budget Support Emergency Act of 2015 (D.C. Act 21-127, July 27, 2015, 62 DCR 10201).

Temporary Legislation

For temporary (225 day) amendment of section, see § 5(c) of Real Property Tax Clarity and Litter Control Administration Temporary Amendment Act of 2001 (D.C. Law 14-8, June 13, 2001, law notification 48 DCR 5916).

For temporary (225 day) amendment of section, see § 12(p) of Tax Clarity and Recorder of Deeds Temporary Act of 2002 (D.C. Law 14-191, October 5, 2002, law notification 49 DCR 9549).

For temporary (225 day) amendment of section, see § 12(p) of Tax Clarity and Related Amendments Temporary Act of 2003 (D.C. Law 14-228, March 23, 2003, law notification 50 DCR 2741).

Short Title

Short title: Section 1240 of D.C. Law 18-111 provided that subtitle Y of title I of the act may be cited as the “Retail Service Station Transfer Tax Act of 2009”.

Editor's Notes

Application of 14-307: Section 1104 of D.C. Law 14-307 provided: “Sections 1102 and 1003 shall apply as of January 1, 2003.”

Exemption from taxation for conversion of a partnership to a limited liability company: Section 3 of D.C. Law 11-38 provided that § 2 of the act shall apply as of July 23, 1994. Exemption from taxation for conversion of a partnership to a limited liability company: For exemption from the transfer tax imposed by this section in connections with the conversion of a partnership to a limited liability company, see § 29-1013(k) as added by § 2(d) of D.C. Law 11-38.

Section 401 of D.C. Law 16-123 provided: “Sec. 401. Sunset. If, pursuant to section 141(a)(1), there are unallocated local revenues, from existing revenue sources, sufficient to fund Title I, then section 141(a)(2) and (3), and section 161 shall sunset.”.