Understanding Property Taxes When Selling Your Home in Washington DC

Are you planning to sell your home in Washington DC? One of the most important
financial considerations in a real estate transaction is property taxes.

Understanding how property taxes work when selling a home in Washington DC can
help you avoid unexpected costs and ensure a smooth closing. As an experienced
Realtor in Washington DC, Dan Wheeler helps sellers navigate the complexities
of property taxes to maximize their profits.

In this guide, we’ll break down what property taxes are, how they affect your
home sale, and what you need to know to prepare for closing.

What Are Property Taxes?

Property taxes are annual taxes paid to local governments based on the
assessed value of real estate. These taxes fund schools, infrastructure, and
public services in the Washington DC area.

Key facts about property taxes in Washington DC:

• The Washington DC property tax rate
  is $0.85 per $100 of assessed value for residential properties.
•  Taxes are assessed annually but paid in two
  installments, March 31 and September 15.
•  Property values are reassessed yearly by
  the Office of Tax and Revenue (OTR).
  
  

How Property Taxes Affect Home Sellers

When selling your home, you are responsible for property taxes up until the
closing date. After that, the buyer assumes responsibility.

Key factors that impact property taxes for sellers:

• Prorated Property Taxes: Sellers pay property taxes only for the
  portion of the year they owned the home.
• Outstanding Tax Balances: Any unpaid property taxes must be settled
  before closing.
• Tax Adjustments at Closing: If you’ve already paid taxes for the full
  year, you may receive a reimbursement from the buyer.

How to Calculate Your Property Tax
Responsibility

To estimate how much you owe in property taxes when selling your home, follow
these steps:

Step 1: Find Your Annual Property Tax Bill

• Check your latest tax statement or visit
  the DC Office of Tax and Revenue website.
  
  

Step 2: Divide by 365 Days

• Calculate the daily tax amount by
  dividing your annual tax bill by 365.
  
  

Step 3: Multiply by the Number of Days You Owned the Home

• Multiply the daily tax amount by the
  number of days you own the property in the current tax year.
  
  

Example Calculation:

• If your annual property tax is $8,500,
  your daily tax rate is $23.29.
  - If you owned the home for 150 days, your tax responsibility would be $3,493.50.
  
  

Can You Deduct Property Taxes When Selling?

Many homeowners ask whether property taxes are tax-deductible when
selling a home in Washington DC. While property taxes paid before the sale are
often deductible, tax laws can be complex.

General tax guidelines include:

• Property taxes paid before closing
  may be deductible on your federal tax return.
• If property taxes are paid at closing, they may be considered part of
  the sale expenses.
•  Always consult a qualified tax
  professional to determine your specific tax benefits.
  
  

What Happens If You Owe Back Property Taxes?

If you have unpaid property taxes, they must be settled before closing.
A tax line on your home can delay or prevent the sale.

How to resolve unpaid property taxes:

• Check your tax balance with the DC Office of Tax and Revenue.
• Pay off any outstanding taxes before listing your home.
• Negotiate with the buyer—in some cases, buyers may agree to cover a
  portion of unpaid taxes in exchange for a lower price.
  
  

How to Prepare for Property Taxes When
Selling

Follow these steps to ensure a smooth home sale:

1. Verify Your Tax Records

• Ensure your property tax payments are up
  to date.
•  Request a tax statement from the DC
  Office of Tax and Revenue.
  
  

2. Work with a Realtor Who Understands Property Taxes

Dan Wheeler can guide you through tax calculations and closing adjustments.

3. Budget for Property Tax Payments at Closing

 Be prepared to cover any outstanding
taxes from the proceeds of your home sale.

Final Thoughts

Understanding property taxes is essential when selling a home in Washington DC.
By preparing ahead of time and working with a knowledgeable Realtor like Dan
Wheeler, you can avoid unexpected tax issues and ensure smooth closing.

If you need help navigating property taxes and selling your home, contact
Dan Wheeler today for expert guidance and a personalized selling strategy.