On October 1, 2006, the DC Recordation Tax and the DC Transfer Tax rates will be increasing from 1.1% of the sales price to 1.45% of sales price for transactions with purchase prices of $400,000 and above. (Buyers pay the Recordation Tax and sellers pay the Transfer Tax.)
As a precaution, title companies are advising sellers and buyers with late-September settlements to consider moving those settlements to earlier in the month. (The transaction has to be "on record" with the District no later than October 1st to avoid the higher tax; recordations sometimes takes a few days beyond settlement). Example: A settlement that would occur on Friday, Sept 29th would not be on record with the District until the following week and thus be subject to the higher recordation tax.
After October 1st, the recordation tax on a $500,000 purchase, for example, will be $7,250 --- or, $1,750 HIGHER than under the old rate.
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