Summary#
B26-0802, the Pied-à-Terre Property Tax Amendment Act of 2026, would amend Chapter 8 of Title 47 of the D.C. Code. It would create a new Class 1C property-tax category for certain small residential properties without a homestead deduction; the bill says its goal is to raise revenue from some high-value properties.
- Starting in tax year 2027, a residential property with no more than two dwelling units and no homestead deduction would generally be Class 1C. The bill does not limit the class definition to properties whose owners live elsewhere.
- For Class 1C properties, the combined real-property tax rates would be $0.85 per $100 of taxable assessed value at or below a threshold starting at $2.5 million, and $2.50 per $100 if the value is above it. The higher rate applies to the whole taxable assessed value, not just the amount above the threshold.
- The threshold would be adjusted annually using a consumer-price index measure. The bill also directs the Mayor to calculate rates for Classes 1A, 1B, and 1C each year starting in 2027, under a separate formula.
- Owners could prove that specified exceptions apply, including qualifying construction, certain long-term rentals, certain properties advertised for sale or rent, and specified federal officials and employees. Owners must prove an exception to the Mayor.
- The bill would require Class 1C assessment notices to explain the classification. It also provides limited protection from late fees for owners who timely challenge the classification and pay the assessed tax.
The bill is at the introduced stage and is not law. The parent D.C. Code provisions were not supplied, so the current rules and how the changes fit with them could not be verified.
What it means for you#
- Owners of affected properties: If your property is Class 1C and its taxable assessed value is above the adjusted threshold, the bill sets a much higher combined tax rate on its full taxable assessed value. A property at or below the threshold would have the $0.85 rate under the bill.
- Owners claiming an exception: You would have to prove the exception to the Mayor. For example, a rental exception requires a qualifying long-term agreement, market rent, no owner occupancy during the year, and an unexpired rental housing business license.
- Owners challenging classification: You must challenge on time and pay the assessed tax to receive the bill’s late-fee protection. That protection ends 30 days after the Mayor’s final response or June 30 of the following year, whichever comes first.
- Tenants and the public: The bill does not directly change tenants’ rights, income-tax rules, or the District’s residency test. It does not create a new front-line service program or say how any added revenue must be spent.
Money#
The sponsor’s introductory letter says an Office of Revenue Estimate estimate projected more than $130 million in additional revenue over four years; the fiscal statement referred to in the bill was not supplied.
- The bill sets property-tax rates and directs annual rate calculations for three residential property classes.
- No publicly available information. The supplied material gives no estimate of administrative, staffing, or enforcement costs.
What is unclear#
- The supplied text does not explain how the stated $0.85 and $2.50 rates interact with the Mayor’s separate duty to calculate annual rates starting in 2027.
- The bill defines “occupy” as sleeping in a property for six or more continuous hours, but does not spell out how the Mayor would determine whether an owner meets that test.
- The bill does not set out the full process, evidence rules, or review options for proving an exception or challenging a classification.
- The class definition does not require that an owner live outside D.C.; the bill’s introductory letter describes a narrower focus on second homes.
- The sponsor’s revenue estimate and the actual number of properties affected could not be checked against the fiscal statement or parent law, which were not supplied.
Case for#
- The bill appears intended to raise revenue from some high-value residential properties that do not receive a homestead deduction.
- A higher rate on qualifying properties could raise revenue without changing the property-tax rate for every home.
- The listed exceptions could reduce the impact on properties undergoing substantial construction, certain long-term rentals, and properties genuinely offered for sale or rent.
- Annual threshold adjustments could keep the value cutoff from remaining fixed as prices change.
Case against#
- A property just above the threshold would face the higher rate on its full taxable assessed value, creating a sharp tax increase at the cutoff.
- The legal class is not expressly limited to second homes or owners who live outside D.C.; some owners who do not claim a homestead deduction may therefore be affected.
- The bill does not clearly reconcile its stated rates with the Mayor’s annual rate-setting duty.
- The Mayor must decide whether owners have proved an exception, but the bill does not provide detailed evidence or review procedures.