D.C. Code § 42-1102

Current through codified legislation effective September 18, 2024

Section 42-1102 - Deeds exempt from tax

The following deeds shall be exempt from the tax imposed by this chapter:

(1) Repealed;

(2) Deeds to property acquired by the United States of America or the District of Columbia, unless its taxation has been authorized by Congress;

(3) Deeds to real property acquired by an institution, organization, corporation, or government entitled to exemption from real property taxation under § 47-1002 (or exempt from recordation taxes under a law of the United States of America or the District of Columbia); provided, that, unless waived by regulation, a copy of a filed real property tax exemption application accompanies the deed at the time of recordation; provided further, that this exemption shall not apply to property which is exempt under § 47-1002(29) or § 47-1002(30);

(4) Deeds to property acquired by an institution, organization, corporation, or association entitled to exemption from real property taxation by special act of Congress, which property was acquired solely for a purpose or purposes for which such special exemption was granted; provided, that a return, under oath, showing the purpose or purposes for which such property was acquired, shall accompany the deed at the time of its offer for recordation;

(5) A purchase money mortgage or purchase money deed of trust that is recorded simultaneously with the deed conveying the real property for which the purchase money mortgage or purchase money deed of trust was obtained;

(6) Supplemental deeds;

(7) Deeds between spouses, parent and child, grandparent and grandchild, or domestic partners, as defined in § 32-701(3), without actual consideration therefor;

(8) Tax deeds;

(9) Deeds of release of property which is security for a debt or other obligation;

(10) Deeds of personal representatives of decedents, acting under the provisions of Title 20, transferring to a distributee, without additional consideration, real property of a decedent or a life estate in the real property;

(11) When a permanent loan deed of trust or mortgage is submitted for recordation and the tax on the construction loan deed of trust or mortgage has been timely and properly paid, no additional tax liability arises under § 42-1103, except where the amount of the obligor's liability secured by the permanent loan deed of trust or mortgage exceeds the amount of his liability secured by the construction loan deed of trust or mortgage, in which case the tax shall be calculated only on the amount of such difference; provided, however, that such permanent loan deed of trust or mortgage shall contain a reference to the construction loan deed of trust or mortgage and the date and instrument number where it is recorded;

(12) Deeds to property transferred to a qualifying lower income homeownership household in accordance with § 47-3503(a);

(13) Deeds to property transferred to a qualifying nonprofit housing organization in accordance with § 47-3505(c);

(14) Deeds to property transferred to a cooperative housing association in accordance with § 47-3503(a)(2);

(15) Construction loan deeds of trust or mortgages or permanent loan deeds of trust or mortgages in accordance with § 47-3503(a)(3);

(16) Repealed.

(17) A deed by a transferor that conveys bare legal title to the trustee of a revocable trust, without consideration for the transfer, where the transferor is the beneficiary of the trust;

(18) A deed to property transferred to a beneficiary of a revocable trust as the result of the death of the grantor of the revocable trust;

(19) A deed to property transferred by the trustee of a revocable trust if the transfer would otherwise be exempt under this section if made by the grantor of the revocable trust;

(20) A deed to property transferred to a resident management corporation in accordance with § 47-3506.01;

(21) A security interest instrument in Class 1 Property, as that class of property is established pursuant to § 47-813, that contains no more than 5 dwelling units. Each security interest instrument submitted for recordation for which an exemption under this paragraph is claimed shall have affixed thereto an affidavit stating the following:

"I (we) the owner(s) of the real property described within certify, subject to criminal penalties for making false statements pursuant to § 22-2405 of the District of Columbia Code, that the real property described within is Class 1 Property, as that class of property is established pursuant to § 47-813, with 5 or fewer units.";

(22)

(A) A deed to property transferred pursuant to § 29-204.06;

(B) In order for limited liability companies to receive the exemption provided in subparagraph (A) of this paragraph, the Recorder of Deeds shall be notified, within 30 days, of any change to the members or interests in profits and losses during the 12-month period following the effective date of the conversion so that the applicable recordation tax can be imposed;

(C) Violation of the provisions of subparagraph (B) of this paragraph shall be punishable pursuant to § 42-1120 [repealed];

(23) A deed for the improvements known as the District of Columbia Correctional Treatment Facility, located on a portion of Lot 800 of Square 1112E, with a street address of 1901 E Street, S.E.;

(24)

(A) Deeds conveying, vesting, granting, or assigning title to, an interest in, a security interest in, or an economic interest in the real property (and any improvements thereon) described as Square 454, Lots 41, 824, 838, 857, 877, 878; the portion of the public alley that reverted to (i) former Lot 820, (which is currently known as Lot 866), and (ii) former Lot 821 (which is currently known as Lot 867) pursuant to the Plat of Alley Closing filed with the Surveyor of the District of Columbia in Liber 17 at folio 74; and the portions of the public alley that will revert to Lots 41, 824, 838, 857, 877 and 878, all in Square 454, pursuant to the alley closing approved by the Closing of Public Alleys in Square 454 and Square 455, S.O. 98-194 Act of 1999, effective October 22, 1999 (D.C. Law 13-48; 46 DCR 6768);

(B) The amount of all taxes, fees, and deposits exempt, abated, or waived under this paragraph, § 2-1217.31(b), and §§ 47-902(17), 47-1002(26), and 47-2005(32) [(32) repealed], shall not exceed, in the aggregate, $ 7 million;

(25)

(A) Deeds conveying, vesting, granting, or assigning title to, an interest in, a security interest in, or an economic interest in the real property (and any improvements thereon) described as Square 299, Lot 831, in connection with debt or equity financing for the Mandarin Oriental Hotel Project until the Development Sponsor sells the Mandarin Oriental Hotel Project, as evidenced by the recordation of a deed conveying title to Square 299, Lot 831, at which time such amounts shall be due and payable without penalty or interest;

(B) The amount of all taxes, fees, and deposits deferred under this paragraph, and §§ 2-1217.32(b), 47-902(19), 47-1002(27), and 47-2005(34), shall not exceed, in the aggregate, $4 million;

(C) For purposes of this paragraph, the term:

(i) "Development Sponsor" means Portals Hotel Site, LLC, a Delaware limited liability company, and its successors and assigns;

(ii) "Mandarin Oriental Hotel Project" means the acquisition and initial development, construction, equipping, and furnishing of a Mandarin Oriental hotel within the Portals project, located on Square 299, Lot 831, consisting of a 400-room hotel with approximately 33,000 square feet of associated meeting and banquet space, 2 restaurants, a health spa and fitness center totaling approximately 10,000 square feet, and approximately 90,000 square feet of public parking space for approximately 200 cars;

(iii) "Mandarin TIF Bonds" means the tax increment financing bonds issued in connection with the Mandarin Oriental Hotel Project pursuant to the Tax Increment Revenue Bonds Mandarin Hotel Project Emergency Approval Resolution of 2000, effective March 7, 2000 (Res. 13-510; 47 DCR 2133), and the Mandarin Hotel Project Modification Approval Resolution of 2000, effective December 19, 2000 (Res. 13-745; 48 DCR 83);

(D) This paragraph shall apply upon the closing of the sale of the Mandarin TIF Bonds;

(26) Deeds executed pursuant to a decree of divorce or of separate maintenance or pursuant to a written instrument incident to such divorce or separation;

(27) Deeds to an entity described in paragraph (3) of this section of a lease or ground rent for a term, including renewals, that is at least 30 years; provided, that if the entity were the owner of the real property in which the possessory interest is conveyed, the real property would have been entitled to exemption from real property taxation under § 47-1002; provided further, that, unless waived by regulation, a copy of a filed real property tax exemption application accompanies the deed at the time of its offer for recordation;

(28)

(A) A deed to residential real property, without consideration for the transfer, to the trustee of a special needs trust established for the benefit of a trust beneficiary who has a disability, as defined in § 1614(a)(3) of the Social Security Act, approved October 30, 1972 (86 Stat. 1471; 42 U.S.C. § 1382c(a)(3) ), or from the trustee of a special needs trust that, by its terms, terminates upon the death of the trust beneficiary with a disability.

(B) For the purposes of subparagraph (A) of this paragraph, a trust is a special needs trust if the trust instrument:

(i) States, among its purposes, that the trust assets are not intended to be counted in determining the beneficiary's eligibility for needs-based governmental benefits; and

(ii)

(I) Names the beneficiary with a disability as the sole trust beneficiary during his or her lifetime; and

(II) Provides that the beneficiary with a disability shall not serve as trustee;

(29) A security interest instrument securing a credit enhancement, such as a letter of credit, issued by a for-profit business organization, where such credit enhancement is required in connection with affordable housing financing provided by the District of Columbia Housing Finance Agency that is funded in whole or in part through bonds issued pursuant to the U.S. Department of Treasury's New Issue Bond Program. This paragraph shall apply as of January 1, 2009;

(30) Beginning October 1, 2009, a security interest instrument pertaining to a cooperative housing association;

(31) Beginning October 1, 2009, a deed of economic interest pertaining to a limited-equity cooperative, as defined under § 47-802(11);

(32) A deed of title or a security interest instrument as to which the Mayor has issued a valid certification of exemption pursuant to § 47-1005.02 as to both the property conveyed or encumbered and the grantee of the deed of title or the grantor of the security interest; provided, that, unless waived by regulation, to claim an exemption a copy of the certification of exemption shall accompany the deed of title or security interest instrument at the time it is submitted for recordation;

(33) A security interest instrument executed by a borrower in connection with a loan under the Industrial Revenue Bond Forward Commitment Program authorized by subchapter II-B of Chapter 3 of Title 47 [§ 47-340.01 et seq.]; provided, that unless waived by regulation, a certification by the Mayor that the security interest instrument is entitled to this exemption accompanies the security interest instrument at the time it is presented for recordation;

(34) Deeds to property transferred to a named beneficiary of a revocable transfer on death deed under subchapter IV of Chapter 6 of Title 19 [§ 19-604.01 et seq.], by reason of the death of the grantor of the revocable transfer on death deed;

(35) Deeds to property transferred between the electric company and the District pursuant to § 34-1313.11(c); and

(36)

(A) Deeds conveying, vesting, granting, or assigning title to, an interest in, a security interest in, or an economic interest in the real property (and any improvements thereon) described as Square 5633, Lots 802, 803, 804, 805, 806, 807, 808, 809, 810, 811, 812, 813, 814, 815, 816, 817, 818, 822, 823, 824, 825, 826, 827, 828, 829, 830, 831, 7000, 7009, and 7010 that are recorded between October 1, 2020, and December 31, 2020.

(B) The amount of all taxes, fees, and deposits exempted under this paragraph and D.C. Official Code § 47-902(28), shall not exceed, in the aggregate, $420,840.

D.C. Code § 42-1102

Amended by D.C. Law 23-149, § VII-O-7172 , 67 DCR 10493, eff. 12/3/2020.

Mar. 2, 1962, 76 Stat. 11, Pub. L. 87-408, title III, § 302; June 24, 1980, D.C. Law 3-72, § 206, 27 DCR 2155; Sept. 13, 1980, D.C. Law 3-92, § 101(b), 27 DCR 3390; Mar. 10, 1982, D.C. Law 4-72, § 3(b), 28 DCR 5273; Oct. 8, 1983, D.C. Law 5-31, § 10(b), 30 DCR 3879; Mar. 16, 1989, D.C. Law 7-205, § 5, 36 DCR 457; Sept. 9, 1989, D.C. Law 8-20, § 2(b), 36 DCR 4564; Mar. 7, 1992, D.C. Law 9-56, § 3, 38 DCR 7281; June 11, 1992, D.C. Law 9-120, § 4(a), 39 DCR 3195; June 14, 1994, D.C. Law 10-128, § 101(b), 41 DCR 2096; Sept. 8, 1995, D.C. Law 11-38, § 4(b), 42 DCR 3269; June 3, 1997, D.C. Law 11-276, § 7(a), 44 DCR 1416; Apr. 3, 2001, D.C. Law 13-241, § 3, 48 DCR 610; June 9, 2001, D.C. Law 13-305, § 506(b), 48 DCR 334; Oct. 19, 2002, D.C. Law 14-213, § 26, 49 DCR 8140; Mar. 25, 2003, D.C. Law 14-232, § 3, 49 DCR 9764; Apr. 4, 2003, D.C. Law 14-282, § 9(a), 50 DCR 896; Mar. 13, 2004, D.C. Law 15-105, § 73, 51 DCR 881; Sept. 8, 2004, D.C. Law 15-176, § 2, 51 DCR 5707; Apr. 5, 2005, D.C. Law 15-293, § 12, 52 DCR 1465; Oct. 20, 2005, D.C. Law 16-33, §§ 1212, 1296, 52 DCR 7503; Apr. 7, 2006, D.C. Law 16-91, § 114, 52 DCR 10637; Mar. 2, 2007, D.C. Law 16-191, § 62, 53 DCR 6794; Apr. 24, 2007, D.C. Law 16-305, § 59, 53 DCR 6198; Mar. 20, 2008, D.C. Law 17-118, §201, 55 DCR 1461; Sept. 12, 2008, D.C. Law 17-231, § 34, 55 DCR 6758; Dec. 13, 2011, D.C. Law 19-60, § 2, 58 DCR 9169; Sept. 20, 2012, D.C. Law 19-168, §§ 7102(a), 7133, 59 DCR 8025; Mar. 5, 2013, D.C. Law 19-210, § 5, 59 DCR 13171; Dec. 24, 2013, D.C. Law 20-61, § 7152(a), 60 DCR 12472; Dec. 4, 2014, D.C. Law 20-141, § 204, 61 DCR 7763; Feb. 26, 2015, D.C. Law 20-155, §§ 7032, 7103(d), 7104, 61 DCR 9990; July 11, 2017, D.C. Law 22-5, § 3(a), 64 DCR 4943; Oct. 30, 2018, D.C. Law 22-168, § 7092(a), 65 DCR 9388.

Section 7014 of D.C. Law 21-160 repealed § 3 of D.C. Law 19-60. Therefore the changes made to this section by D.C. Law 19-60 have been given effect.

Applicability and expiration of subtitle KK of title I, §§ ,1295 to 1300, of D.C. Law 16-33: Sections 1298 and 1299, as amended by D.C. Law 17-219, § ,7068(l), (m) provided:

"Sec. 1298. Conditional applicability.

"(a) Sections 1296 and 1297 shall apply for taxable years beginning after September 30, 2005.

"(b) Repealed.

"Sec. 1299. Repealed."

Section 3 of D.C. Law 19-60 provided: "Sec. 3. Applicability. This act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan."

Application of Law 8-20: See Historical and Statutory Notes following § 42-1101 .

Mayor authorized to issue rules: Section 6 of D.C. Law 9-56 provided that the Mayor shall, pursuant to subchapter I of Chapter 5 of Title 2, issue rules to implement the provisions of the act.

Section 5 of D.C. Law 9-120 provided that the Mayor may, pursuant to subchapter I of Chapter 5 of Title 2, issue rules to implement the provisions of the act.

Application of Law 10-128: See Historical and Statutory Notes following § 42-1101 .

Applicability of D.C. Law 15-176: Section 7 of D.C. Law 15-176 provided: "Sections 2 through 6 shall apply as of October 1, 2003."

Section 3 of D.C. Law 19-60 provided:

"Sec. 3. Applicability.

"This act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan."

The Budget Director of the Council of the District of Columbia has determined that as of September 20, 2012, the fiscal effect of Law 19-60 has been included in an approved budget and financial plan. Therefore, the provisions of this section, enacted by Law 19-60, are in effect.

Application of Law 19-210: Section 7 of D.C. Law 19-210 provided that the act shall apply as of January 1, 2012.

Applicability of D.C. Law 20-61: Section 7152(b) of D.C. Law 20-61 provided that § ,7152(a) (which amended § 42-1102(32) ) shall apply as of September 20, 2012.

D.C. Law 20-141 became effective on Dec. 4, 2014, but was repealed prior to its effective date by emergency D.C. Act 20-377, § 7114, eff. July 14, 2014, 61 DCR 7598, by emergency D.C. Act 20-449, § 7104, eff. October 10, 2014, 61 DCR 10915, by emergency D.C. Act 20-566, § 7104, eff. January 9, 2015, 62 DCR 884, and by D.C. Law (Act 20-424), § 7104, 61 DCR 9990.