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Residential Real Estate Update

Did you know that the DC Council recently passed a bill that will increase recordation and transfer taxes to 5% on certain commercial transactions?

June 27, 2019

Did you know that the DC Council recently passed a bill that will increase recordation and transfer taxes to 5% on certain commercial transactions?  B23-0209 (the “Fiscal Year 2020 Budget Support Act of 2019” or the “Bill”) will increase transfer and recordation taxes from 2.9% to 5% on commercial transactions of $2 million or more.  The tax increase will apply to both direct transfers of commercial property by deed and to transfers of economic interests in certain entities that own commercial property in D.C.  Additionally, the recordation tax payable on applicable Deeds of Trust will increase from 1.45% to 2.5%.  The Bill was unanimously approved by the D.C. Council at the Final Reading on June 18, 2019.  Next, the Bill will be sent to the Mayor for consideration.  It is anticipated that the Mayor will sign the legislation given that the Mayor’s FY 2020-2023 budget and financial plan included a proposal to increase recordation and transfer taxes on commercial transactions of $2 million or more in order to increase funding for affordable housing.  Additionally, the Bill must go through a 30-day congressional review period.  If Congress does not withhold its approval, then the Bill will become law.  The effective date will be October 1, 2019.  For a copy of B23-0209, click here.

If you have any questions, please don’t hesitate to contact us.

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Matthew D. Alegi

Sarah D. Cline

Danielle M. Dolch

David M. Kochanski

Marc D. Lipman

MORE INFORMATION

For more information regarding our Residential Real Estate Settlements Group or our general real estate transactions and litigation practice, please contact the Group Chair at settlements@shulmanrogers.com.