Roughly 1,600 District homeowners could soon lose a valuable real estate tax break and owe for the benefit they’ve received in the past, because they failed to confirm their eligibility for the program.
After two attempts over eight months to verify their eligibility for the Homestead deduction — which requires that the homeowner live in the residence — the District’s Office of Tax and Revenue is ready to pull the plug, said Martin Skolnik, director of the Real Property Tax Administration in OTR. The 1,600 people will be billed back taxes, penalties and fees totaling more than $880,000 if they do not appeal by early 2007.
“This is the third chance we’ve given these people,” Skolnik said. “If they don’t answer this last one, when they get their tax bill, the benefit will be gone. We want to be fair, but we want to be aggressive.”
Tax bills are mailed March 1.
The Homestead deduction reduces a home’s assessed value by $60,000 before the tax bill is calculated. The benefit totals $552 per home per year, or $49 million citywide.
About 8,000 homeowners, out of the 90,000 who receive the deduction, were first contacted earlier this year as part of the OTR audit. Each property owner sought had no car registered in D.C., no city driver’s license, were not registered to vote in Washington and had not filed D.C. income taxes.
“We questioned whether or not that person would truly be domiciled in the District,” Skolnik said.
OTR is preparing a second batch of about 7,000 reconfirmation letters forthose homeowners whose mailing address and premise address don’t match, or whose address is that of a company.
