Reminder: Recordation and Transfer Tax Rates Changing on October 1 in D.C., Montgomery County

Lerch, Early & Brewer

Lerch, Early & Brewer

Starting October 1, D.C.’s recordation and transfer tax rates will decrease for the first time in four years, allowing the industry to enjoy cost savings on affected transfers commencing on the first day of the District’s 2024 fiscal year. 

In 2019, the D.C. Council increased recordation and transfer tax rates for commercial and mixed-use properties valued above $2M to a combined rate of 5%. That increase is scheduled to expire on Saturday, September 30, 2023, after which each of the recordation and transfer tax rates will be restored to the prior rate of 1.45%, for an aggregate charge of 2.9%.

Although there was concern that the increased rate would be extended beyond the current September 30 expiration date by the Council, this concern was laid to rest earlier this year after several Councilmembers rejected proposed legislation to this effect submitted by Councilmember Zachary Parker, which was later withdrawn. 

Meanwhile, in Montgomery County, the Council elected to increase its recordation taxes. On and after October 1, transfers valued above $600,000 will now result in:

  • A County recordation tax of 2.04% on consideration paid from $600,000.01 – $750,000,
  • A County recordation tax rate of 2.156% for consideration paid from $750,000.01 – $1M, and
  • A County recordation tax rate of 2.27% for consideration paid above $1M.

Fortunately, County transfer taxes will remain at the existing rate of 1%, State transfer taxes will also remain at the existing rate of 0.5%, and there also was no increase to County recordation taxes for transfers valued at or below $600,000. 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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