This $5,000 federal tax credit is available to first-time home buyers in DC who are single, married filing jointly, head-of-household, or qualifying widow(er). The credit is $2,500 if married filing separately.

In order to claim the credit on your federal 1040 document, you must have purchased (closed on) a main home in DC during the tax year and not have owned a main home in DC during the one year period ending on the date of purchase.


You must attach IRS Form 8859 to form 1040 in order to receive the credit.

Income restrictions and other qualifications may apply. A buyer can not claim the 2009 federal first-time home buyer credit and the DC first-time buyer credit at the same time. You must file the federal form 1040 to claim this credit. For more information, contact the Internal Revenue Service at (800) 829-1040 or visit the local IRS Taxpayer Assistance Center at 500 North Capitol Street, NW, Washington, DC.

The DC Lower Income Home Ownership Tax Abatement program was established by the DC government to provide tax relief for lower income home buyers in DC. In order to qualify, the owner must occupy the property and the sale price must be less than $326,760.

If a buyer qualifies, then they are exempt from paying the DC Recordation Tax (1.1%) at settlement, and the DC Transfer Tax (1.1%) the seller pays at settlement is applied as a credit to the buyer.

Property taxes for the first 5 years of ownership, beginning in the month of October after the deed is recorded, will also be waived.


Qualifying Income Table (effective February, 13 2008):

Persons in household		Household Income Limits
1.		$51,660
2.		$59,040
3.		$66,420
4.		$73,800
5.		$79,680

For more information: http://otr.cfo.dc.gov/otr/frames.asp?doc=/otr/lib/otr/rod-9.pdf