D.C. Code § 47-863

Current through codified legislation effective October 30, 2024

Section 47-863 - Reduced tax liability for property owners over age 65 and for property owners with disabilities; rules

(a) For the purposes of this section, the term:

(1) "Adjusted gross income" shall have the same meaning as in section 62 of the Internal Revenue Code of 1986, approved August 16, 1954 (68A Stat. 17; 26 U.S.C. § 62).

(1A) "Eligible household" means:

(A) In the case of a house or condominium, an individual's residence:

(i) That comprises a dwelling unit;

(ii) That is Class 1 Property, as defined in § 47-813, and contains not more than 5 dwelling units therein;

(iii)

(I) That is owned at least 50%, in whole or in part, by the individual who:

(aa) Is 65 years of age or older; and

(bb) Whose household adjusted gross income is less than $125,000, increased annually, beginning October 1, 2014, by the senior or disabled cost-of-living adjustment (if the adjustment does not result in a multiple of $50, rounded to the next lowest multiple of $50); or

(II)

(aa) Has been determined to have a permanent and total disability by the Social Security Administration, is receiving Supplemental Security Income or Social Security Disability, is receiving railroad retirement disability benefits, or is receiving federal or District of Columbia government disability payments; and

(bb) Whose household adjusted gross income is less than $125,000, increased annually, beginning October 1, 2014, by the senior or disabled cost-of-living adjustment (if the adjustment does not result in a multiple of $50, rounded to the next lowest multiple of $50).

(B) In the case of a cooperative housing association that is Class 1 Property, as defined in § 47-813, a shareholder's or member's residence:

(i) That comprises a dwelling unit;

(ii) That is owned at least 50%, in whole or in part, by the individual who:

(I)

(aa) Is 65 years of age or older; and

(bb) Whose household adjusted gross income is less than $125,000, increased annually, beginning October 1, 2014, by the senior or disabled cost-of-living adjustment (if the adjustment does not result in a multiple of $50, rounded to the next lowest multiple of $50); or

(II)

(aa) Has been determined to have a permanent and total disability by the Social Security Administration, is receiving Supplemental Security Income or Social Security Disability, is receiving railroad retirement disability benefits, or is receiving federal or District of Columbia government disability payments; and

(bb) Whose household adjusted gross income is less than $125,000, increased annually, beginning October 1, 2014, by the senior or disabled cost-of-living adjustment (if the adjustment does not result in a multiple of $50, rounded to the next lowest multiple of $50); and

(iii) That, by reason of his or her ownership of stock or membership certificate, a proprietary lease, or other evidence of membership, is occupied by right by the shareholder or member with at least a 50% interest which permits the occupation of the dwelling unit.

(1B) [Repealed].

(2) "Household adjusted gross income" means the adjusted gross income of all persons residing in a household, as determined by each person's federal income tax year ending immediately before the beginning of the real property tax year during which the deduction provided under subsection (b) of this section shall be applicable, excluding the adjusted gross income of any person who is a tenant by virtue of a written lease for fair market value.

(2A) [Repealed].

(3) "Residence" means the principal place of residence in the District of an individual, shareholder, or member who is domiciled in the District that is located on a lot that is entitled to the homestead deduction provided under § 47-850 or § 47-850.01 for the real property tax half year to which the deduction provided under subsection (b) of this section shall be applicable.

(4) Repealed.

(5) "Taxable assessment" means the assessed value of the real property, reduced, if applicable, by the credit under § 47-864 or the deduction under § 47-850.

(6) "20 consecutive tax years" shall include no more than 2 consecutive gaps of ownership where each gap shall not exceed 120 days.

(b)

(1) In the case of a house or condominium, an eligible household shall be eligible for a 50% deduction in computing real property tax liability. The deduction shall be computed by multiplying the tax rate by 50% of an amount equal to the current tax year's taxable assessment. The deduction shall be apportioned equally between each installment during a tax year and shall not be carried forward or carried back.

(2)

(A) In the case of a cooperative housing association, the deduction shall be computed by multiplying the tax rate by 50% of an amount equal to the current tax year's taxable assessment attributable to the eligible household. The deduction shall be apportioned equally between each installment during a tax year and shall not be carried forward or carried back.

(B) The taxable assessment attributable to the eligible household shall be determined in the same manner as the cooperative housing association was assessed under § 47-820.01, including any prorations thereunder.

(b-1) [Repealed].

(c)

(1) In the case of a house or condominium, and to qualify the eligible household to receive the deduction, the individual shall complete and file with the Mayor an application in a form prescribed by the Mayor. The individual shall certify, under penalty of perjury, the information provided on the application form and the application form shall be filed in the manner prescribed by the Mayor. The Mayor may require the individual to provide any information which the Mayor considers necessary, including all taxpayer identification numbers of the individual, any other owner, any person with legal or equitable title, and any person in the household of the individual. The Mayor may also require the individual, any other owner, any person with legal or equitable title, and any person in the household of the individual to submit information after the deduction has been allowed to determine whether the real property remains an eligible household and entitled to the deduction.

(2)

(A) For the cooperative housing association to qualify and receive the deduction, the shareholder or member shall complete and file with the Mayor an application in a form prescribed by the Mayor. The shareholder or member shall certify, under penalty of perjury, the information provided on the application form, and the application form shall be filed in the manner prescribed by the Mayor. The Mayor may require the shareholder or member to provide any information which the Mayor considers necessary, including the taxpayer identification numbers of the shareholder or member, any other person with an ownership or membership interest, and any person in the household of the shareholder or member. The Mayor may also require the shareholder or member, any other person with an ownership or membership interest, and any person in the household of the shareholder or member to submit information after the deduction has been granted to determine whether the cooperative housing association remains entitled to the deduction for the eligible household.

(B) The Mayor may require the officers or managers of the cooperative housing association to distribute the application forms to its shareholders or members and to collect the completed application forms from the shareholders or members for return to the Mayor. Officers and managers of a cooperative housing association shall submit such other information as the Mayor may require.

(C) The deduction shall be passed on to the eligible household by the cooperative housing association during the corresponding tax year.

(d) If a properly completed and approved application is filed during the period October 1 through March 31 of the tax year, the real property shall receive the deduction for the entire tax year. Notwithstanding subsection (b) of this section, if a properly completed and approved application is filed during the period April 1 through September 30, the real property shall receive 1/2 of the deduction, which shall be applied to the second installment only.

(e) The application form filed by the individual, shareholder, or member shall apply to the initial tax year, or applicable installment, and to any succeeding tax year thereafter for which the deduction is allowed.

(f)

(1) Within 45 days from the date of the notice rescinding or denying the deduction, the owner may petition for an administrative review of the rescission or denial and appeal from a final determination thereof to the same extent as if the appeal were filed under § 47-825.01a(d)(2).

(2) Notwithstanding paragraph (1) of this subsection, if the eligible household is transferred and continued to qualify for the deduction 30 days or less before the date of execution of the deed of transfer, the applicant shall not be required to notify the Mayor of the change in eligibility.

(3) If the tax is paid within 30 days of the corresponding bill, timely notification of the change in eligibility shall preclude assessment of penalty and interest.

(4) If the change in eligibility occurs during the period October 1 through March 31 of the tax year, the deduction shall be disallowed for the entire tax year.

(5) Notwithstanding subsection (a) of this section, if the change in eligibility occurs during the period April 1 through September 30, the real property shall receive 1/2 of the deduction, which shall be applied to the first installment only.

(6)

(A) Notwithstanding the rescissions of the deduction pursuant to paragraphs (4) and (5) of this subsection, if the applicant's required ownership interest in the real property is transferred to a new owner, shareholder, or member who does not apply or qualify for the deduction, the real property shall nevertheless be entitled to the apportioned amount of the deduction applicable to the installment payable during the half tax year during which such ownership interest was transferred. At the end of the half tax year, the deduction shall cease.

(B) If the applicant purchases another real property or interest in a housing cooperative for which he or she shall make application for the deduction, and the application and purchase occurs during the same half tax year when the transfer occurred, subsections (i) and (j) of this section shall not apply to the extent that both real properties may benefit from the deduction during that half tax year and, thereafter, only the newly purchased real property or housing cooperative in which the applicant acquired newly an interest shall benefit from the applicant's deduction.

(C) Notwithstanding the foregoing, a real property shall not benefit from more than one deduction in any half tax year; provided, that in the case of a housing cooperative, the real property shall not benefit from more than one deduction related to an eligible household in any half tax year.

(f-1) A denial of the deduction shall be subject to the provisions of § 47-813(d-1)(3A) to the same extent as an appeal of a Class 3 classification.

(f-2) [Repealed].

(g) If real property tax is owing as a result of an erroneous or improper deduction, the following shall apply:

(1) Except in the case of cooperative housing associations, if the eligible household was transferred, the applicant or former owner, and not the real property shall be personally liable for the amount of the delinquent real property tax which was not paid timely during the period when the applicant or former owner had an ownership interest in the eligible household, together with interest and penalty at the same rate as provided in this chapter for the late payment of real property tax. The tax shall be considered due on the date that the total amount of real property tax was due but unpaid and shall be collected in the manner prescribed under Chapter 44.

(2) Notwithstanding paragraph (1) of this subsection, if the eligible household was transferred and the grantee failed to timely record a deed under § 47-1431 (or other evidence of the transfer in the case of a cooperative housing association), the real property shall be liable for the amount of the delinquent real property tax which was not timely paid, together with interest and penalty as provided in this chapter for the late payment of real property tax.

(3) In all other cases, the real property shall be liable for the amount of the delinquent real property tax which was not paid timely, together with interest and penalty as provided in this chapter for the late payment of real property tax; provided, that the Chief Financial Officer may establish a payment plan to collect the delinquent taxes.

(h) The eligibility of an eligible household for the deduction shall not be affected by the transfer of the eligible household into a revocable trust if the transfer is without consideration and the eligible household remains the residence of the applicant-grantor before and after the transfer.

(i) No other person in the household of the individual, shareholder, or member shall claim a deduction for an eligible household in the District. The cooperative housing association shall not receive a deduction for an eligible household if the basis of the deduction is another person in the household of the shareholder or member.

(j) If an individual, shareholder, or member claims more than one eligible household in the same tax year, and has not timely notified the Mayor of all changes in eligibility, the Mayor shall disallow the deduction for all eligible households claimed by the individual, shareholder or member.

(k)

(1) The Mayor may contract with a collection agency inside or outside of the District to verify the contents of any application form or return for the purposes of determining the eligibility of any eligible household.

(2) All funds collected by the collection agency and belonging to the District shall be remitted to the Mayor not less than once a month. Forms to be utilized for the remittances may be prescribed by the Mayor. The Mayor may require that the collection agency furnish a bond securing compliance with the provisions of this subsection and the contract with the District.

(3) At the discretion of the Mayor:

(A) The collection agency may charge a collection fee not in excess of 25% of the total amount of the delinquent taxes, excluding penalties and interest, that is actually collected; or

(B) The collection agency may be remunerated by fee, percentage of taxes collected, or both.

(4) Notwithstanding any other provision contained in this title, confidential information related to the owner of the real property may be provided to a collection agency for purposes of collecting a delinquent tax under this chapter. If the information is provided to a collection agency under this subsection, the collection agency shall not disclose the information to a third party, other than the owner (or his or her representative), unless the Mayor would be authorized by law to make the disclosure. A collection agency, or employee of a collection agency, violating the provisions of this subsection shall be guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than the amount set forth in [§ 22-3571.01], or imprisoned for not more than 180 days, or both. All prosecutions under this paragraph shall be brought in the Superior Court of the District of Columbia on information by the Attorney General for the District of Columbia in the name of the District of Columbia.

(l) In the case of a house or a condominium, the real property tax bill shall indicate whether the real property is receiving the deduction.

D.C. Code § 47-863

Sept. 23, 1986, D.C. Law 6-153, § 5, 33 DCR 4787; Mar. 7, 1992, D.C. Law 9-56, § 5, 38 DCR 7281; Sept. 10, 1992, D.C. Law 9-145, § 105, 39 DCR 4895; Oct. 7, 1992, D.C. Law 9-177, § 8, 39 DCR 5868; June 14, 1994, D.C. Law 10-127, §2, 41 DCR 2050; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; June 25, 2002, D.C. Law 14-147, § 2(g), 49 DCR 4219; Apr. 4, 2003, D.C. Law 14-282, § 11(l), 50 DCR 896; June 5, 2003, D.C. Law 14-307, § 1303(f), 49 DCR 11664; Mar. 13, 2004, D.C. Law 15-105, § 72(c), 51 DCR 881; Dec. 7, 2004, D.C. Law 15-205, § 1162(e), 51 DCR 8441; Apr. 13, 2005, D.C. Law 15-354, § 73(b)(6), 52 DCR 2638; Oct, 20, 2005, D.C. Law 16-33, §§ 1082(c), 1262(b), 1297(a)(3), 52 DCR 7503; Mar. 2, 2007, D.C. Law 16-191, § 102, 53 DCR 6794; Apr. 24, 2007, D.C. Law 16-305, § 73(b), 53 DCR 6198; Aug. 15, 2008, D.C. Law 17-216, § 4(e), 55 DCR 7500; Mar. 25, 2009, D.C. Law 17-345, § 2(e), 56 DCR 962; July 13, 2012, D.C. Law 19-155, § 2(d), 59 DCR 5590; July 13, 2012, D.C. Law 19-165, § 2, 59 DCR 6188; June 11, 2013, D.C. Law 19-317, § 286(f), 60 DCR 2064; Dec. 24, 2013, D.C. Law 20-61, § 7323, 60 DCR 12472; May 28, 2014, D.C. Law 20-105, § 2, 61 DCR 3474; June 26, 2014, D.C. Law 20-117, § 12(a), 61 DCR 2032; Feb. 26. 2015, D.C. Law 20-155, § 7052(a)(2), 61 DCR 9990; Oct. 22, 2015, D.C. Law 21-36, §§ 7014, 7202, 62 DCR 10905.

Application of 14-307: Section 1304 of D.C. Law 14-307 provided: "Sections 1302 and 1303 shall apply as of October 1, 2002."

Mayor authorized to issue rules: Section 6 of D.C. Law 9-56 provided that the Mayor shall, pursuant to subchapter I of Chapter 5 of Title 2, issue rules to implement the provisions of the act.

Section 3 of D.C. Law 14-147 provided that section 2 shall apply as of October 1, 2001, except insofar as the retroactive application results in an increase of tax to the real property or owner thereof.

Section 15(b) of D.C. Law 14-282 provided: "Sec. 15. Applicability. Section 11(1) shall apply as of October 1, 2001."

Applicability and expiration of subtitle EE of title I, §§ 1261 to 1265, of D.C. Law 16-33: Sections 1263 and 1264 of D.C. Law 16-33, as amended by section 5(g) of D.C. Law 16-191 and D.C. Law 17-219, § 7068(c), (d), provided:

"Sec. 1263. Applicability; conditional effect.

"(a) Section 1262 shall apply for taxable years beginning after September 30, 2005."

"(b) Repealed.

"(c) Repealed.

"Sec. 1264. Repealed."

Applicability and expiration of subtitle KK of title I, §§ 1295 to 1300, of D.C. Law 16-33: Sections 1298 and 1299, as amended by D.C. Law 17-219, § 7068(l), (m) provided:

"Sec. 1298. Conditional applicability.

"(a) Sections 1296 and 1297 shall apply for taxable years beginning after September 30, 2005.

"Sec. 1299. Repealed."

Section 3 of D.C. Law 17-345 provided: "Sec. 3. Applicability. (a) Section 2(c)(1)(A) and (B), (c)(2), (e)(1)(A) and (B), and (e)(2) shall apply for tax years beginning after September 30, 2001.

"(b) Section 2(c)(1)(C) and (e)(1)(C) shall apply as of January 2, 2007."

Applicability of D.C. Law 19-317: Section 401 of D.C. Law 19-317 provided that the act shall apply only to offenses committed on or after June 11, 2013.

Applicability of D.C. Law 20-61: Section 11001 of D.C. Law 20-61 provided that, except as otherwise provided, the act shall apply as of October 1, 2013.

Section 3 of D.C. Law 19-165 was repealed by D.C. Law 20-61, § 7322.

Section 2 of D.C. Law would have deleted "in whole or in part" following "50%" in (a)(1A)(A)(iii)(I) and (a)(1A)(B)(ii); added (a)(1B); rewritten (a)(2); added (a)(2A); added (b-1); rewritten (c), (d), (e), and (f); repealed (f-1); added (f-2); and would have rewritten (g), (h), (i), (j), and (k).

Applicability of D.C. Law 20-105: Section 3 of D.C. Law 20-105 provided that the act shall apply as of October 1 of the fiscal year in which it is funded and included in an approved budget and financial plan, as certified by the Chief Financial Officer to the Budget Director of the Council in a certification published in the District of Columbia Register.

Applicability of D.C. Law 20-117: Section 12(b) of D.C. Law 20-117 provided that § 12(a) of the act, which amended (a)(1A), shall apply to tax years beginning after September 30, 2013.

Applicability of D.C. Law 20-117: Section 18 of D.C. Law 20-117 provided that the act shall apply as of October 1, 2013.

Section 7014 of D.C. Law 21-36 repealed D.C. Law 20-105.