D.C. Mun. Regs. tit. 9, r. 9-602
The basis for the tax is the transfer of real property and, except as otherwise provided in the Act or this chapter, the tax shall be paid within thirty (30) days of the transfer, and at the same time the deed evidencing the transfer is submitted for recordation.
The measure of the tax shall be the consideration for the transfer of the property conveyed by the deed.
The term "consideration," as defined in § 401 of the Act, as amended, (D.C. Code § 47-901(5)) , includes consideration actually paid or ultimately required to be paid for real property, whether that consideration is in the form of cash or is in some other form.
If there is no consideration for the property which is the subject of the transfer (or if the consideration is nominal), consideration is construed to be the fair market value of the real property involved, in accordance with § 404 of the Act, the fair market value shall be subject to review by the Office.
The term "fair market value" shall have the same meaning as defined in D.C. Code § 47 -802(4).
The term "nominal consideration" means any price paid or any item exchanged in return for title to real property which bears no reasonable resemblance to the fair market value of the real property. If the consideration paid is less than 30% of the fair market value of the property, it shall be deemed to bear no reasonable resemblance to the fair market value of the property and, therefore, shall be deemed to be nominal.
The following formula shall be applied for purposes of determining if the consideration paid is 'nominal':
The fair market value of the real property shall be multiplied by 30%. If the consideration paid is less than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall be deemed to be nominal. If the consideration paid is deemed nominal, the transfer tax shall be based on the fair market value of the property. If the consideration paid is equal to or greater than 30% of the fair market value of the real property for which a deed is submitted for recordation, the consideration paid shall not be deemed to be nominal.
Examples:
1 The consideration stated on the transfer tax return is $ 20,000 and the fair market value of the property for which a deed is submitted for recordation is $ 75,000.00. 30% of the fair market value of the property is $ 22,500 ($ 75,000.00 X .30 = $ 22,500.00). Since the consideration paid is less than 30% of the fair market value of the real property, the consideration paid shall be deemed to be nominal. In this case, the transfer tax shall be based upon the fair market value of the property. Therefore, the transfer tax shall be computed as follows:
($ 75,000 X 100%) X .011 = $ 825 (transfer tax due)
2 The consideration stated on the transfer tax return is $ 40,000 and the fair market value of the property for which a deed is submitted for recordation is $ 100,000. 30% of the fair market value of the property is $ 30,000 ($ 100,000 X .30 = $ 30,000). Since the consideration paid is more than 30% of the fair market value of the property, the consideration paid shall not be deemed to be nominal. In this case, the transfer tax shall be based on the higher of the assessed value or sales price. Therefore, the transfer tax shall be computed as follows:
$ 100,000 (assuming Recorder of Deeds determines assessed value equals fair market value) X .011 = $ 1,100 (transfer tax due)
3 The consideration stated on the transfer tax return is $ 36,000 and the fair market value of the property for which a deed is submitted for recordation is $ 120,000. 30% of the fair market value of the property is $ 36,000 ($ 120,000 X .30 = $ 36,000). Since the consideration paid is equal to 30% of the fair market value of the real property, the consideration paid shall not be deemed to be nominal. In this case, the transfer tax shall be based on the higher of the assessed value or sales price. Therefore, the transfer tax shall be computed as follows:
$ 120,000 (assuming Recorder of Deeds determines assessed value equals fair market value) X .011 = $ 1,320 (transfer tax due)
If the Recorder of Deeds determines that the consideration paid is nominal, the transfer tax shall be determined based on the fair market value of the property for which a deed is submitted for recordation. The transfer tax determined shall be paid at the time the deed is recorded before the deed shall be accepted for recordation.
In determining whether consideration paid is nominal, the Recorder of Deeds may use his discretion in considering any information available to him at the time of recordation from which the market value of the property may be determined. Such information may include, but is not limited to:
Any taxpayer aggrieved by a determination made by the Recorder of Deeds that the consideration paid is nominal may file a claim for refund in accordance with D.C. Code §§ 47-915 and 47-3310.
Any taxpayer aggrieved by a determination made by the Recorder of Deeds of the fair market value used for purposes of calculating the transfer tax may file a claim for refund in accordance with D.C. Code §§ 47-915 and 47-3310. Evidence of market value shall be submitted with the claim for refund.
The provisions set forth in this section shall apply to all deeds submitted to the Recorder of Deeds for recordation, including deeds for foreclosure real estate transactions and deeds "in lieu of foreclosure."
D.C. Mun. Regs. tit. 9, r. 9-602