Homeowners in the District have the lowest property taxes in comparison to its four adjacent counties: Fairfax, Arlington, Montgomery, and Prince George’s Counties. While middle- and high-income DC residents typically own homes that are worth more than homeowners in most of the suburban jurisdictions, tax bills in the District are far lower, often by more than $1,000 a year. That is because the District has the lowest residential property tax rate in region and because the city’s property tax has other provisions that limit property bills.
This analysis identified the average value of homes owned by residents at a middle-income level and a higher-income level in DC and in four suburban jurisdictions, and then compared property taxes for homes at those values. It finds that DC residents own homes that are worth more than in the suburbs, yet have lower property taxes.
- Middle-income DC residents — with incomes between $68,500 and $129,000 — own homes worth about $500,000. This is about the same as the average home value for middle-income residents in Arlington, but somewhat higher than average home value for middle-income homeowners in Fairfax and Montgomery counties and far higher than in Prince George’s County.
- The average property tax for DC homes at this value — $2,800 — is $1,500 lower than the property tax bills for middle-income homeowners in Fairfax and Arlington counties and $700 lower than for middle-income homeowners in Montgomery and Prince George’s Counties.
- Higher-income DC residents — with incomes between $129,000 and $214,000 — own homes worth about $640,000. This is slightly lower than the average home value for higher-income residents in Arlington, but higher than average home value for higher-income homeowners in Fairfax and Montgomery Counties and more than double the home value for higher-income Prince George’s County homeowners.
- The average property tax for higher-income DC homeowners at this value – $3,900 — is $1,500 lower than the property tax bills for higher-income homeowners in Fairfax and Arlington counties and $1,000 lower than for higher-income homeowners in Montgomery. Tax bills are about the same for high-income households in DC and Prince George’s County, even though DC’s higher-income homeowners own homes worth much more.
Low aggregate property tax rates and property tax bills suggest that DC’s property taxes do not affect its competitiveness in the regional housing market.
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