- Washington, D.C.’s proposed pied-à-terre property tax would apply to non-owner-occupied residences valued at $2.558 million or more, affecting approximately 600 properties.
- The proposal would create a Class 1C tax rate of $2.50 per $100 of assessed value, with exemptions for specified construction, rental, government official, and listed properties.
- The measure is projected to raise more than $130 million over four years.
- A D.C. Council public hearing is scheduled for October 16, 2026.
These Key Takeaways were generated by AI and reviewed by a BDO professional.
The District of Columbia Council recently proposed a pied-à-terre property tax amendment, similar to that enacted in New York City earlier this year (see our related Alert). The revenue-raising proposal targets non-owner-occupied residences worth at least $2.558 million and is estimated to generate more than $130 million over the District’s four-year financial plan.
The amendment would create a Class 1C tax category for high-value second homes of part-time District residents. The proposed Class 1C tax rate is $2.50 per $100 of assessed value; specific properties, including those under construction, rented to long-term tenants at market rates, owned by federal appointees or members of Congress, or advertised for sale or rent during part of the year, are exempt. The measure — an attempt to raise revenue from households that use District services for part of the year but do not pay corresponding District income taxes — would affect approximately 600 properties.
By targeting a narrow segment of the market, the proposal seeks to raise revenue without increasing property taxes on primary residences generally. Its implementation likely would require housing data validation, property tax classification, and cross-checks with homestead deduction records.
The Council has scheduled a public hearing for October 16, 2026.
BDO Insights
- The proposal reflects a broader trend of jurisdictions using property tax classifications and surcharges to reach high-value homes that are not used as primary residences. New York City’s implementation shows that such regimes can create significant valuation, ownership, occupancy, and documentation questions even before substantive tax disputes arise.
- The District’s reliance on homestead status might simplify initial classification, but it can also sweep in properties that are not traditional pieds-à-terre, including properties held for legitimate rental, construction, estate-planning, or transition purposes. The practical impact will depend on the final statutory exclusions, classification procedures, and documentation standards.
- Affected owners should not assume that the proposal will be enacted in its introduced form and should consider providing comment during the October 16 hearing on the proposal.
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