First-time Homebuyers In The District of Columbia

First-Time Homebuyer Individual Income Tax Credit -- This federal tax credit is available to first-time homebuyers in the District of Columbia. The credit is the smaller of:

• $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er) ($2,500, if married filing separately) or The purchase price of the home.

In general, you may claim the credit if:

• You purchased a main house during the tax year in the District of Columbia, and
• You (and your spouse, if married) did not own any other main home in the District of Columbia during the 1-year period ending on the date of purchase.

Income restrictions and other qualifications may apply. You must file the federal form 1040 to claim this credit. For more information, contact the US Internal Revenue Service at 800.829.1040 or visit the local IRS Taxpayer Assistance Center at 500 North Capitol Street, NW, Washington, DC. You may also visit the DC's Office of Tax and Revenue's web site.

First Time Homebuyers Lower Income Home Ownership Tax Abatement - Eligible homeowners, including non-profit organizations and shared equity investors, may receive a five-year tax abatement and be exempt from paying recordation and transfer taxes. The five-year period for the Lower Income Home Ownership Tax Abatement begins on October 1, after your deed has been recorded and you have previously applied for the abatement. To qualify, you must meet the following conditions:

• The property must be owner-occupied by a first time homebuyer;
• The owner must meet the income level requirement; and
• The property must be less than $250,000 in value

For additional information, log onto the DC's Office of Tax and Revenue's website or call the Recorder of Deeds at 202.727.5374.

DC Housing Finance Agency (DCFHA) - The DC Housing Finance Agency (HFA) is committed to making affordable housing a reality for new homebuyers in the nation's capital. Like all HFAs nationwide, we issue tax-exempt bonds to finance single-family homes and to encourage developers to create quality single and multifamily housing in DC. Borrower income limits, maximum sales price, and target neighborhood restrictions apply. For more information, visit http://www.dchfa.org/ or call 202.777.1600.

Homestead Exemption - This deduction reduces your real property's assessed value by $30,000 prior to computing the yearly tax liability. The homestead deduction is limited to residential property. To qualify:

• An application must be on file with the Office of Tax and Revenue;
• The property must be occupied by the owner/applicant and contain no more than 5 dwelling units (including the unit occupied by the owner);
• The property must be the principal residence (domicile) of the owner/applicant.

For additional information, visit the website of the DC's Office of Tax and Revenue