Washington DC Real Estate Transfer Taxes: An In-Depth Guide (2024 Update)

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By Jon Stubbs Updated March 20, 2024

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Who pays transfer taxes? | When are transfer taxes paid? | Methodology

Washington D.C. has a variable transfer tax rate of $1.10 to $1.45 per $100. For a house worth $561,419 — the median home price in the district — the transfer tax due will be $6,176.

The specifics on who pays the transfer tax can be negotiated, but traditionally, the buyer and seller split the cost.

Clever Real Estate can help you cut costs here — our concierge team will partner you with an experienced agent who can help you negotiate a good deal with your buyer on transfer taxes. You'll save big by paying only 1.5% in commission, which is much less than the Washington D.C. average of 2.83%.

💰 Find an agent who can negotiate your transfer taxes

You can't change transfer tax rates. But, an experienced Clever Real Estate agent can help you win the negotiation battle so you aren't stuck paying all of the transfer taxes on your own.

When you choose Clever, you'll work with a full-service realtor with transfer tax expertise in your local market.

Clever's service is totally free, with zero obligation — you can walk away at any time.

What Are Real Estate Transfer Taxes?

When property changes ownership in a real estate transaction, a real estate transfer tax is charged. Real estate transfer taxes are not the same as recording fees, mortgage fees, or title fees. You'll see them on a different line item on your closing documents.

The real estate transfer tax is calculated as a percentage of the final selling price or the home's assessed value. The percentage charged can also vary by county within a state, or be influenced by population level and other factors.

Because these taxes vary on a state, regional, and local level, buyers and sellers must work with an experienced real estate agent to ensure they understand what they'll be charged and who will pay the tax when buying or selling a property.

👋 Get a free comparative market analysis!

Match with top-rated agents from brand-name brokerages, like Keller Williams and RE/MAX, and request a free CMA today! Sellers will save thousands in realtor commissions with pre-negotiated 1.5% listing fees.

Clever's service is 100% free with zero obligation. Interview as many agents as you like until you find the perfect fit — or walk away at any time.

Who pays transfer taxes in Washington D.C.: The buyer or the seller?

In Washington, D.C., the tax is split between the buyer and the seller. The seller pays the recordation tax, and the buyer pays the transfer tax. The fee isn't paid out of hand, but rather rolled into a mortgage or deducted from the home seller's profit.

Your real estate agent should be able to answer any questions about the tax, and they also may suggest using it during negotiations to trade off for something you'd rather the buyer pay.

How Much Are Transfer Taxes in Washington, D.C.?

Washington, D.C.'s real property transfer tax is 1.1% the sale price of homes less than $400,000 and 1.45% on homes over $400,000 per $500 of value over $100. Note that this is the rate for transfers of residential property; commercial and other forms of real estate are charged different rates.

There are exemptions to the real estate transfer tax in Washington, D.C. If the property's ownership is being transferred due to a divorce, no tax is charged. First-time home buyers can receive a tax abatement of the entire transfer tax if buying a home for less than $332,000.

While the transfer tax is usually split in Washington, D.C., the buyer can ask the seller to pay it all, or vice versa. This could be an item that your realtor can negotiate for you.

Can You Deduct Transfer Taxes?

The federal government doesn't allow you to deduct transfer taxes on your federal tax return. You can, however, use them to offset any gain on sale.

A home sale's profits are only subject to capital gains if the profit is above $250,000 for an individual or $500,000 for a family. The tax is charged on the profit from the sale, or the difference between what you paid for an asset and what it sold for, rather than on the total selling price.

To offset this gain, include transfer taxes in your property's cost basis. If you're the seller, add it to the property's original cost. If you're the buyer, just remember them when you eventually sell. Tax laws and rules can change, so consult with a tax professional before taxing the offset.

Other Considerations

Selling or buying a home can be subject to a confusing variety of taxes and fees. Most homeowners and buyers lack the expertise to identify and understand them all, which is why an agent is there to help. Who pays which taxes and fees impacts your overall value when buying a new home or your profit when selling.

The real estate transfer tax will appear on your final HUD-1 form. It's just one of many line items on the form that may not make much sense to you. Given the complexity of a real estate transaction, and the amount of money involved, consider partnering with an experienced, local real estate agent to help you navigate the paperwork.

Clever will partner you with a local real estate agent who knows how to deal with the state’s tax and helps negotiate a deal in your favor. What’s more, our agents charge only a 1.5% listing fee compared to the state average of 2.83%! The money you'll save can more than offset the cost of the transfer taxes.

» SAVE: Learn more about how a Clever agent can help you navigate Washington, D.C. transfer taxes

Methodology

  • Transfer tax amounts are based on government website information as of February 2024.
  • We gathered our listing commission rate data from a December 2023 survey of 630 of our partner agents.
  • Home values, list prices, and sale prices are based on Zillow data as of March 2024.

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