D.C. property owners whose 2008 delinquent real estate tax bills total less than $1,200 will not have their holdings auctioned during the District’s annual tax sale, the tax office announced last week.
During the tax sale, scheduled for Wednesday through Friday, the Office of Tax and Revenue auctions the liens on D.C. properties with back tax bills. As of Friday there were about 4,900 such properties.
But OTR issued emergency regulations Friday that let some 2,000 owners off the auction hook. Any tax bill — including penalties and interest — of less than $1,200 will not be sold.
The decision will mean about $1 million less for D.C.’s already meager coffers — assuming the property owners fail to pay voluntarily, as they have so far. The city faces a $1 billion-plus shortfall over the next three years.
The tax office has chosen only to “auction the properties that are more desirable to people,” said Richie McKeithen, director of OTR’s Real Property Tax Administration. The staff would be overwhelmed, he said, if the government put every property with a past due bill up for bid.
“It gives us a better opportunity to process this when the tax sale is all over,” McKeithen said. “By having a smaller amount of properties, that gives us more opportunity to run more efficiently as opposed to having large sums of properties that aren’t desirable by anyone.”
About 300 property owners have paid their delinquent bills since the public release of the tax sale list in late July. The total amount still owed is roughly $26.5 million, and the 2,000 bills under $1,200 total $1.12 million — or roughly 4.2 percent of missing receipts.
“It’s a minuscule amount of money in the scheme of things to put such an effort on,” McKeithen said. Delinquent taxpayers are not off the hook for their bills no matter how much they owe, as they will continue to accrue taxes, penalties and interest and may face auction in 2010. The tax sale brings together bankers, investors and opportunists who hope to snag real estate on the cheap. In the vast majority of cases, even if a property is sold, the owner pays the tax bill long before the deed changes hands.
