The D.C. Council might raise deed recordation and transfer taxes when it votes Tuesday on the city’s 2007 budget plan, tacking $1,000 or more onto the cost of a home to benefit affordable housing programs and a lengthy lineup of community nonprofits.
The Committee on Finance and Revenue recently agreed to increase the taxes on most commercial and residential properties by a quarter percent, from 1.1 percent to 1.35 percent.
The increase would add $1,250 to the closing cost of a $500,000 property, though a home purchased for less than $400,000 would be exempt.
In his budget plan, Mayor Anthony Williams recommended a 0.4 percent deed tax increase on residential sales only, an idea the council quickly spurned.
Ed Lazere, executive director of the D.C. Fiscal Policy Institute, said the committee proposal seems more balanced, not only because everyone pays, but because it spares low- and moderate-income buyers.
But Daniel Lusk, a member of the Washington, D.C., Association of Realtors, said the city shouldn’t be expanding its $7.5 billion budget in the first place.
Putting the onus of raising more money on property buyers and sellers could affect an ebbing market, he warned.
“We’re seeing a reduction in the number of transactions,” Lusk said. “This makes it even tougher. People aren’t going to be able to afford to move around in the market, making space for new people to move in.”
Under the finance and revenue proposal, the $76.7 million in new revenue would be divvied up among housing programs, homeless initiatives and a slate of nonprofits.
The earmarks include $15.5 million for rent supplements, $6 million for energy assistance and $250,000 for the Capital Breast Care Center.
Roughly $15 million would be directed to the Unified Communications Center, after the committee rejected the mayor’s plan to jack up the E-911 fee, a utility tax attached to every District phone bill.
In March, the council agreed to increase the deed tax on commercial properties by 0.1 percent, but only if sales tax revenues are not enough to cover the school modernization program. That increase would not be implemented until at least 2008.
Follow the new tax revenues:
» $8 million for emergency assistance to prevent eviction
» $7 million for Homeless No More
» $4 million for mental health housing
» $3 million for work force housing
» $1.8 million for New Communities planning
» $250,000 for a housing coordinator
» $508,200 to provide health benefits to city employees’ same-sex partners
» $409,400 for the Tudor Place Historic House and Garden
» $200,000 for the D.C. Jewish Community Center’s Center for the Arts
» $50,000 for the D.C. Assembly on School-Based Health Care
» $400,000 for the Peaceoholics
» $100,000 for Positive Choices
» $50,000 for Saint Mary’s Court Senior Living Facility
» $50,000 for Bread for the City
» $50,000 for D.C. Central Kitchen
» $50,000 for Spanish Steps
