May 30, 2024 - News

A "mansion tax" could be coming to D.C.

A mansion in the Spring Valley neighborhood of D.C.

Photo: Amanda Andrade-Rhoades/The Washington Post via Getty Images

A new "mansion tax" would take effect in D.C. under a budget proposal advanced by council members yesterday.

Why it matters: Lawmakers are using that tax and other changes to make ends meet in a tough budget year — to the dismay of Mayor Muriel Bowser, who opposes the council's tweaks.

State of play: The property tax rate would go up on the value of homes above $2.5 million.

For example, the tax bill for a $2.6 million home would go up 0.3%, according to Council chair Phil Mendelson's office.

  • A home worth $3 million would pay about 2.7% more. For a $5 million home, it's an 8.8% increase, equaling $3,741, per Mendelson's office.
  • An estimated 2,800 single-family homes and condominiums will be affected.

The fine print: The tax rate would increase from $0.85 to $1 per $100 of assessed value over $2.5 million. (The rate would still be $0.85 for the first $2.5 million of the assessment.)

Mendelson announced the updated proposed budget on Tuesday. His changes to the mayor's version include:

  • Restoring $70 million to a fund that incentivizes the pay of childcare workers.
  • Funding the "baby bonds" program — trust funds for low-income children — with sports gambling revenue.
  • Increasing payroll taxes on businesses.

Lawmakers will take a final vote on the budget next month.

Editor's note: This story has been updated to reflect that the tax rate is going up for homes worth more than $2.5 million (not $2.5 million and above), to correct the percentage increases used in the examples of different home values, and to add the precise dollar increase per $100 of assessed value.

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