What Is the DC Real Estate Transfer Tax?
Every time real property changes hands in Washington, DC, two related taxes kick in. The transfer tax is paid by the seller; the recordation tax is paid by the buyer. Both are calculated as a percentage of the sale price (or fair market value when the price is nominal).[1]
The base rate for both taxes is 1.1%, with an additional 0.35% surtax — the Housing Production Trust Fund surcharge — that was introduced in 2006 and applies to most sales. So for the majority of transactions, the effective rate is 1.45%.[2]
| Property / Scenario | Transfer Tax Rate | Recordation Tax Rate |
|---|---|---|
| Residential sale under $400,000 | 1.10% | 1.10% |
| Residential sale $400,000 or more | 1.45% | 1.45% |
| Commercial / industrial property (any price) | 1.45% | 1.45% |
| First-time homebuyer (residential, individual) | 1.10% or 1.45% (same) | 0.725% (reduced) |
| New mortgage / deed of trust | N/A | 2.00% of loan amount |
These rates are set by DC Code §47-903 (transfer tax) and DC Code §42-1102 (recordation tax). They have been stable since October 2023, when a temporary commercial tax hike — which pushed the combined rate to 5% — was rolled back.[3]
Step 1
Check for Exemptions First
Before any math happens, the calculator checks whether the transfer qualifies for an exemption under DC Code §47-902. If it does, all taxes are reduced to zero — and the calculation stops there.[4]
Common exemptions include transfers between spouses or domestic partners (with no money changing hands), transfers to a qualifying nonprofit, transfers by the US or DC government, estate distributions to heirs, and — as of October 1, 2025 — transfers to a certified Community Land Trust.[5]
Example A — Exempt: Spouse Transfer
A homeowner deeds their Capitol Hill rowhouse to their spouse as part of a separation agreement. No money is exchanged.
Exemption: §47-902(5) — spouse-to-spouse, no consideration
Transfer Tax = $0. Recordation Tax = $0. Calculation ends here.
Example B — Not Exempt: Standard Sale
An investor sells a Columbia Heights condo to an unrelated buyer for $450,000. No exemptions apply.
Exemption check: none applicable
No exemption. Proceed to Step 2.
Step 2
Determine the Tax Base
The tax base is not just the sale price. Under DC law, “consideration” includes any debt the buyer assumes from the seller — such as taking over an existing mortgage — because that assumption is real economic value transferred to the seller.[6]
The formula: Tax Base = Sale Price + Assumed Mortgage
Example A — No Assumed Debt
A buyer purchases a Petworth townhouse for $380,000 cash. The seller has no mortgage on the property.
Tax Base = $380,000 + $0 = $380,000
Example B — With Assumed Mortgage
A buyer purchases a Georgetown home for $900,000 and assumes the seller’s existing $200,000 mortgage as part of the deal.
Tax Base = $900,000 + $200,000 = $1,100,000
Step 3
The Nominal Consideration Rule
DC law doesn’t allow sellers to dodge the tax by listing an artificially low price. If the stated sale price is less than 30% of the property’s assessed value, DC treats the consideration as “nominal” and calculates the tax based on the assessed value instead.[6]
This most often arises in gifts between family members, where a small token amount is listed as the price.
Example A — Triggered: Below the 30% Threshold
A parent deeds a Foggy Bottom property to their adult child for a symbolic $1,000. The DC assessed value is $500,000.
30% threshold = $500,000 × 0.30 = $150,000
$1,000 < $150,000 → Nominal consideration rule applies
Tax Base = $500,000 (assessed value used instead)
Example B — Not Triggered: Price Is Above Threshold
A buyer pays $320,000 for a condo with a DC assessed value of $350,000.
30% threshold = $350,000 × 0.30 = $105,000
$320,000 > $105,000 → No adjustment
Tax Base = $320,000 (sale price stands)
Step 4
Fractional Interest Adjustment
Sometimes only a portion of a property changes hands — for example, when co-owners sell their share, or an interest in a partnership holding real estate is transferred. In these cases, the tax base is proportionally reduced to reflect only the share being conveyed.
Formula: Adjusted Tax Base = Tax Base × (Fractional Interest %)
Example A — 50% Interest Sold
Two siblings jointly own a rental property valued at $600,000. One sibling sells their 50% stake to a third party for $300,000.
Adjusted Tax Base = $300,000 × (50 ÷ 100) = $150,000
Tax is calculated on $150,000 — the actual consideration for the partial interest.
Example B — 100% Interest (Full Sale)
A standard full sale of a Shaw condo for $475,000.
Adjusted Tax Base = $475,000 × (100 ÷ 100) = $475,000
No adjustment — the full amount is taxable.
Step 5
Calculate the Base Transfer Tax (1.1%)
Once the adjusted tax base is established, the calculator applies the base transfer tax rate of 1.1%, as mandated by DC Code §47-903.[7] This applies to every non-exempt transfer — residential or commercial, large or small.
Example A — Small Residential Sale
Adjusted tax base: $300,000
Base Transfer Tax = $300,000 × 0.011 = $3,300.00
Example B — Larger Residential Sale
Adjusted tax base: $750,000
Base Transfer Tax = $750,000 × 0.011 = $8,250.00
Step 6
Does the 0.35% Surtax Apply?
In 2006, DC added a 0.35% surtax to fund the Housing Production Trust Fund. Under DC Code §47-903(a-4), this surtax applies to all transfers except residential sales where the tax base is under $400,000.[2]
In plain terms: if you’re selling a home for less than $400,000, you pay only 1.1%. Everyone else — sellers of higher-priced homes, or any commercial property — pays 1.45% total.
Example A — Surtax Does NOT Apply
Residential condo in Brookland, adjusted tax base: $340,000.
$340,000 < $400,000 → Surtax = $0
Only the 1.1% base rate applies. Effective rate: 1.10%
Example B — Surtax DOES Apply
Residential rowhouse in Logan Circle, adjusted tax base: $850,000.
$850,000 ≥ $400,000 → Surtax applies
Both rates apply. Effective rate: 1.45%
Step 7
Calculate the Surtax (0.35%)
When the surtax applies, it’s straightforward: multiply the adjusted tax base by 0.35% (0.0035). This amount is added to the base tax calculated in Step 5.
Example A — Commercial Property
A small retail storefront sells for $600,000. Commercial property always carries the surtax regardless of price.
Surtax = $600,000 × 0.0035 = $2,100.00
Example B — High-Value Residential
A Cleveland Park home sells for $1,200,000.
Surtax = $1,200,000 × 0.0035 = $4,200.00
Step 8
Total Transfer Tax
Add the base tax (Step 5) and the surtax (Step 7). The result is the total transfer tax owed by the seller. DC rounds this to the nearest whole dollar.[8]
Example A — Under $400K (No Surtax)
Residential sale, tax base: $340,000
Base Tax: $340,000 × 0.011 = $3,740.00
Surtax: $0
Total Transfer Tax = $3,740
Example B — Over $400K (With Surtax)
Residential sale, tax base: $850,000
Base Tax: $850,000 × 0.011 = $9,350.00
Surtax: $850,000 × 0.0035 = $2,975.00
Total Transfer Tax = $12,325
Step 9
Recordation Tax (Paid by the Buyer)
The buyer pays a separate recordation tax, calculated on the same adjusted tax base. The standard rate mirrors the transfer tax: 1.1% under $400,000, and 1.45% above. However, qualifying first-time homebuyers pay only 0.725% — half the usual rate — on the recordation tax.[9] This first-time buyer benefit applies only to individuals buying residential property and does not affect the seller’s transfer tax.
Example A — Standard Buyer
Repeat buyer purchasing a $550,000 condo. Recordation rate = 1.45%.
Recordation Tax = $550,000 × 0.0145 = $7,975.00
Example B — First-Time Homebuyer
First-time buyer purchasing the same $550,000 condo. Reduced recordation rate = 0.725%.
Recordation Tax = $550,000 × 0.00725 = $3,987.50
Savings vs. standard rate: $3,987.50
Step 10
Mortgage Recordation Tax
If the buyer is financing the purchase with a new loan, DC imposes a separate 2.0% mortgage recordation tax on the principal amount of the deed of trust.[6] This is paid by the buyer at settlement and is distinct from the deed recordation tax in Step 9. Government buyers are exempt from this tax.
Example A — Typical Mortgage
A buyer takes out a $400,000 mortgage to purchase a home.
Mortgage Recordation Tax = $400,000 × 0.02 = $8,000.00
Example B — Larger Loan
A buyer finances a commercial acquisition with a $1,500,000 loan.
Mortgage Recordation Tax = $1,500,000 × 0.02 = $30,000.00
Step 11
Recording Fees (Flat Charges)
Beyond the percentage-based taxes, the DC Recorder of Deeds charges flat fees for processing documents.[10] These are fixed regardless of the sale price. A $250 penalty is added if a deed is recorded more than 30 days after execution.
| Document | Fee (2026) |
|---|---|
| Deed (any type) | $25 + $5 surcharge = $30 |
| Deed of Trust / Mortgage | $150 + $5 surcharge = $155 |
| Late recording (deed >30 days) | $250 penalty |
Example A — Cash Purchase (No Mortgage)
Buyer pays cash; only a deed is recorded.
Recording Fees = $30 (deed only)
Example B — Financed Purchase
Buyer records both a deed and a deed of trust (mortgage).
Recording Fees = $30 (deed) + $155 (mortgage) = $185
Step 12
Non-Resident Seller Withholding
If the seller is not a DC resident, DC requires the buyer (or settlement agent) to withhold 7.5% of the seller’s net proceeds as a prepayment of DC income tax on any gain.[11] This is not an additional transfer tax — it’s an income tax prepayment — but it affects how much cash the seller walks away with at settlement.
Net proceeds = Sale Price minus Transfer Tax. Withholding = Net Proceeds × 7.5%
Example A — Non-Resident Individual Seller
A Virginia resident sells their DC investment property for $500,000. Transfer tax = $7,250.
Net Proceeds = $500,000 − $7,250 = $492,750
Withholding = $492,750 × 0.075 = $36,956.25
Example B — DC Resident Seller
A DC resident sells their primary home. No withholding required.
Withholding = $0
Step 13
Final Totals: What Each Party Pays
The calculator assembles everything into a clear breakdown by party. The seller’s cost includes the transfer tax, deed recording fee, and any non-resident withholding. The buyer’s cost includes the recordation tax, mortgage recordation tax, and mortgage recording fee.
Example A — Complete Scenario Summary
$550,000 residential sale. Non-resident seller. Buyer takes $400,000 mortgage. Standard (non-first-time) buyer.
Seller: Transfer Tax $7,975 + Deed Fee $30 + Withholding ~$36,900 ≈ $44,905
Buyer: Recordation $7,975 + Mortgage Tax $8,000 + Mortgage Fee $155 = $16,130
Combined Total ≈ $61,035
Example B — Simple Scenario
$300,000 residential sale. DC-resident seller. Cash purchase. No mortgage.
Seller: Transfer Tax $3,300 + Deed Fee $30 = $3,330
Buyer: Recordation $3,300 + Recording $30 = $3,330
Combined Total = $6,660
“The transfer tax is due at recording — there’s no grace period after the deed is filed. Sellers who try to minimize the stated consideration risk triggering the nominal consideration rule and end up paying tax on the full assessed value anyway.”
Important: This guide is for informational purposes only and does not constitute legal or tax advice. Transfer tax rules are complex and fact-specific. Always verify your situation with a qualified DC title agent, real estate attorney, or the DC Office of Tax and Revenue before filing. Rates and rules reflect 2026 guidance and may change with new legislation.