Effective rate, median annual bill, homestead exemption, and assessment cap rules under D.C. Code § 47-850
Median bill is the actual ACS 2022 figure for owner-occupied housing units in District of Columbia. Your specific bill will vary by county and municipality, local mill rates can swing the effective rate by 30%+ within a single state.
Property tax is the one operating cost a DC landlord cannot appeal away by cutting expenses, and in the District the rate you pay turns almost entirely on how your building is classified. A three-unit rowhouse and a 40-unit apartment building both sit in the same residential class, but the moment a property crosses into commercial territory or loses its owner-occupied status, the effective burden changes materially. The rates below are the rates in force for tax year 2026, and the classification rules are where returns are won or lost.
Property tax comes out of net operating income before you ever touch the mortgage, so every basis point of rate flows straight to the bottom line and to your cap rate. On a $2 million Class 1A apartment building at $0.85 per $100, the annual tax is roughly $17,000 before any credits — a fixed line item that rises whenever the District reassesses upward.
Three levers move the number in a DC landlord's favor. First, classification: confirm a mixed-use or small multifamily property is carrying the correct residential class and not an inflated commercial one. Second, vacancy discipline: an empty unit that trips the Class 3 vacant rate at $5.00 per $100 is catastrophic to returns, so the tax code itself rewards keeping units occupied. Third, the assessment appeal: because there is no homestead cap on a rental, a successful challenge to an over-market assessment is often the highest-return hour a DC landlord spends all year. Federal underwriting rules of thumb — such as the 30%-of-income affordability benchmark HUD uses to define a cost-burdened household — set tenant rent ceilings, but they do nothing to shield you from the tax; that job falls entirely to classification and assessment management.
$84,000 deduction from assessed value for primary residence; 10% annual assessment cap.
The exemption is granted under D.C. Code § 47-850. To claim it, owner-occupants must typically file an application with the county assessor (most states require filing once, with renewal triggered only by change of ownership or use). Failure to file the application means full taxation at the non-homestead rate.
A residential rental with three or more units is Class 1A and taxed at $0.85 per $100 of assessed value, regardless of the building's total value, per the DC Office of Tax and Revenue. A building classified as commercial (Class 2) instead pays $1.65 per $100 up to $5 million assessed, $1.77 from over $5 million to $10 million, and $1.89 above $10 million.
No. The Homestead Deduction — which reduces taxable assessed value by $91,950 for tax year 2026 under D.C. Code § 47-850 — requires the property to be the owner's principal residence with no more than five dwelling units. A rental you do not live in receives neither the deduction nor the accompanying assessment cap.
That 0.57% figure from the Tax Foundation measures owner-occupied housing, which benefits from the homestead deduction and assessment cap. A rental pays the full statutory class rate on uncapped assessed value with no homestead offset, so the effective rate on a rental runs higher than the published owner-occupied number.
Vacant property is taxed as Class 3 at $5.00 per $100 of assessed value — roughly six times the Class 1A residential rate. Blighted property (Class 4) is taxed at $10.00 per $100. The high vacant rate is a deliberate policy penalty, so keeping units occupied is both an income and a tax strategy.
A residential property with no more than two units is Class 1B: $0.85 per $100 on the first $2.558 million of assessed value, then $1.00 per $100 on any value above that threshold, per the DC Office of Tax and Revenue. If you do not occupy it, no homestead deduction applies.
Yes. DC assesses at estimated market value, and because a rental has no homestead assessment cap, it is fully exposed to upward reassessments. Filing a timely appeal challenging an over-market assessment is often the single most valuable step a DC landlord can take to control the tax line.
Effective rate source: Tax Foundation analysis of Census ACS 2022 (published 2024). Statutory citation: D.C. Code § 47-850. Last updated July 14, 2026. For informational purposes only, not tax or legal advice. Consult a CPA or tax attorney for your specific situation.
