B26-0149 • 2025

Residential Building Permit Classification Emergency Amendment Act of 2025

Housing Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: Mendelson
Last action: 2025-03-28
Official status: Enacted
Effective date: Not listed

Plain English Breakdown

The text specifies Class 1A applies to properties with permits for new construction OR substantial rehabilitation exclusively for non-transient use; it does not explicitly define a separate tax rate percentage in this excerpt.

Residential Building Permit Classification Emergency Amendment Act of 2025

This law creates a new property tax class for buildings with permits to build or renovate homes, sets rules for when the lower tax rate applies based on application timing, and allows officials to charge back taxes if the building is not used as a home within three years.

What This Bill Does

Adds Class 1A Property status for real property where a permit has been issued to construct new homes or substantially rehabilitate existing ones exclusively for non-transient residential use.
Requires owners to apply and provide documentation approved by the Chief Financial Officer before the classification change takes effect.
Sets rules so properties changing class between October 1 and March 31 are taxed at the Class 1A rate for the entire tax year, while changes from April 1 through September 30 only affect the second half of the year.
Allows officials to reclassify a property back to its original higher tax class if it is not put to predominantly residential use by the time an occupancy certificate is issued or within three years of the permit issuance.
Adds penalties and interest for unpaid taxes resulting from incorrect classification, but allows the Chief Financial Officer discretion to waive these fees in cases of undue hardship.

Who It Names or Affects

Property owners who have building permits to build new homes or significantly renovate existing buildings exclusively for residential use.
The Chief Financial Officer, who manages applications and tax classifications.
Taxpayers whose properties are reclassified because they did not meet the requirements for residential use within the allowed time.

Terms To Know

Class 1A Property: A property category for buildings with permits intended to construct new homes or substantially rehabilitate existing ones exclusively for non-transient residential living, which may qualify for a lower tax rate.
Nontransient Residential Dwelling: Housing meant for people to live in long-term rather than short-term guests; the law requires permits be used exclusively or predominantly for this purpose.
Certificate of Occupancy: An official document stating that a building is safe and ready for its intended use, which triggers deadlines for property classification changes.

Limits and Unknowns

This law expires on June 19, 2025.
The specific criteria the Chief Financial Officer uses to determine 'undue hardship' are not detailed in this text.
Owners must still file for mixed-use classification if required under other sections of the code.

Bill History

2025-03-28 Council of the District of Columbia LIMS
Act A26-0033 Published in DC Register Vol 72 and Page 003336, Expires on Jun 19, 2025
2025-03-24 Council of the District of Columbia LIMS
Returned from Mayor
2025-03-21 Council of the District of Columbia LIMS
Signed by the Mayor and Enacted with Act Number A26-0033, Expires on Jun 19, 2025
2025-03-11 Council of the District of Columbia LIMS
Transmitted to Mayor, Response Due on Mar 25, 2025
2025-03-04 Council of the District of Columbia LIMS
Retained by the Council
2025-03-04 Council of the District of Columbia LIMS
Legislative Meeting
2025-03-03 Council of the District of Columbia LIMS
B26-0149 Introduced by Chairman Mendelson at Office of the Secretary

Official Summary Text

Residential Building Permit Classification Emergency Amendment Act of 2025

Current Bill Text

Read the full stored bill text

ENROLLED ORIGINAL
AN ACT

ACT 26-33
INTHE COUNCIL OF THE DISTRICTOF COLUMBIA
MARCH 21, 2025
‘Toamend,onanemergencybasis,section47-813oftheDistrictofColumbiaOfficialCodeto
provideformoretimelyclassificationchangesforcommercialpropertiesthataretobe
puttoresidentialuse,toprovideforanapplicationprocesstomakeclassification
changes,o provideforappealrightsifsuchapplicationisdenied,andtoprovidefora
clawbackintheeventtherealpropertyisnottimelyputtoresidentialuse.
BE ITENACTED BY THE COUNCIL OF THE DISTRICTOF COLUMBIA,Thatthis
actmaybecitedasthe“ResidentialBuildingPermitClassificationEmergencyAmendmentAct,
of2025”.
Sec.2.Section47-813oftheDistrictofColumbiaOfficialCodeisamendedtoreadas
follows:(a)Subsection(c-9)(2)isamendedasfollows:(1)Subparagraph(A)isamendedtoreadasfollows:*(2)(A)Exceptasotherwiseprovidedinthisparagraphandsubjecttoparagraphs(4)and(5)ofthissubsection,Class1 Propertyshallbecomprisedof:“(iResidentialrealpropertythatisimprovedanditslegaluseis,
fornontransientresidentialdwellingpurposes,andthatisnotClass1BProperty;provided,that
suchpropertymaybeusedtohosttransientguestspursuanttoanunexpiredshort-termrental
licenseendorsementissuedpursuantto§30-201.04;or“(ji)Realpropertyoraportionofrealpropertyforwhichabuildingpermithasbeenissued:“(1)Toconstructanewimprovementforpredominantly
nontransientresidentialdwellingpurpose;or
“(I1)To substantiallyrehabilitatethatportionor allof an
existingimprovementforexclusivelynontransientresidentialdwellingpurposes.”(2)Subparagraph(C)isamendedbystrikingthephrase“designatedas”andinsertingthephrase“designatedsolelyas”initsplace.
ENROLLED ORIGINAL,
(b)Thelead-inlanguageofsubsection(d-2)isamendedbystrikingthephrase“Class3
PropertyorClass4Property,”andinsertingthephrase“Class2Property,Class3Property,or
Class4Property,”initsplace.
(c)Anew subsection(d-3)isaddedtoreadasfollows:
“(d-3)(1)IfrealpropertychangesclassificationtoClass1APropertyasdefinedin
subsection(c-9)(2)(A)(ii)duringtheperiod:
“(A) October | throughMarch 31of the taxyear,thenewly reclassified
Class1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalready
improvedorassessedunder§47-829,shallbetaxedattheClass1APropertytaxratefortheentiretaxyear;or
“(B)April1throughSeptember30ofthetaxyear,thenewlyreclassified
Class1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalready
improved or assessedunder § 47-829,shallbe taxedattheClass1A Propertytaxrateforthe
secondinstallmentonly.
“(2)TheownershallapplyforachangeofclassificationtoClass1APropertyas
definedinsubsection(c-9)(2)(A)(ii)ofthissectionandshallpromptlyprovidecomplete
documentationina manner prescribedby theChiefFinancialOfficertosubstantiateany such
classificationchange beforeitshallbe effective.
“(3)A change inclassificationtoClass 1A Propertyas definedinsubsection(c-
9)(2)(A)(ii)ofthissectionshallbeeffectivebeginninginthehalftaxyearforwhichapplication
ismadeunderparagraph(2)ofthissubsection.
“(4)IfchangeinclassificationtoClass1APropertyasdefinedinsubsection(c-
9)(2\(A)(ii)ofthissectionisdeterminedtobeerroneousbecausetherealpropertywasnotputto
predominantlyresidentialusebytheearlierofeithertheissuanceof anyneworamended
certificateofoccupancy(temporaryorpermanent)foranypartoftheimprovementthereon,or3
yearsfrom issuanceof thebuildingpermit,orthebuildingpermitexpiredand was not renewed
withinone year,theChief FinancialOfficershallreclassifyand taxtherealpropertywithout
limitationforeachtaxyearorhalftaxyearinwhichtherealpropertywasimproperlyclassified
as Class1A Property,subjectonlytosubsection(d-1)(5)(A-i)of thissection,ifthe propertyis
determinedtobeClass3PropertyorClass4Property,orsubsection(d-2)ofthissection,Inthe
eventofsuchreclassification,penaltyandinterestshallbeaddedbeginningfromthedaythe
correctamountoftaxshouldhavebeenduebutnotpaidifthepropertyhadbeenproperly
classified.
“(5)Within 45 days from thedateof thenoticeof denialof Class1A Property
reclassificationunder thissubsection,theowner may petitionforan administrativereviewof the
rescissionor denialand appealfrom afinal determinationthereofto thesame extentas ifthe
appealwerefiledunder§47-825.01a(d)(2).
“(6)Notwithstandingthetimelimitationsinparagraphs(4)and(5)ofthis
subsection,theChiefFinancialOfficer,inhisor herdiscretion,may grantan extensionof time to

ENROLLED ORIGINAL,
complyorwaivepenaltyandinterestassessedpursuanttoparagraph(4)ofthissubsectiontopreventanunduehardshiptotheowner.“(7)Theprovisionsofthissubsection,subsection(c-9)(2)(A)(ii)ofthissection,and§47-829shallnotsupersedetherequirementtotimelyfileformixed-useclassificationfortheupcomingtaxyearpursuanttosubsection(f)ofthissection,whentheannualassessmentforsuchupcomingtaxyearismadeunder§47-824andthecertificateofoccupancy(finalortemporary)wasissued.”.
Sec.3.Applicability.ThisactshallapplyasofApril1,2025.
Sec.4,Fiscalimpactstatement.TheCounciladoptsthefiscalimpactstatementoftheBudgetDirectorasthefiscalimpactstatementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,approvedOctober16,2006(120Stat,2038;D.C.OfficialCode§1-301.47a).
Sec.5.Effectivedate.ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofvetobytheMayor,actionbytheCounciltooverridetheveto),andshallremainineffectfornolongerthan90days,asprovidedforemergencyactsoftheCouneiloftheDistrictofColumbiainsection412(a)oftheDistrictofColumbiaHomeRuleAct,approvedDecember24,1973(87Stat.788;D.C.OfficialCode§1-204.12(a)).
Jl‘Chairman
Councilof the Districtof Columbia

APPROVEDMARCH 21, 2025

[]ITEMONCONSENTCALENDAR
[DDGACTION
DX]VOTEDATE
[X1VOIcEvoTE
RECORDEDVOTEONREQUEST
ABSENT
[ROLLCALLVOTE-Resutt
COUNCILOF THE DISTRICTOF COLUMBIA
WASHINGTON,DC,20004
FinalReading
‘March4,2025
Approved

CouncitMember__|Aye[Nay|NV_|AB[Rec|CouncitMember[Aye|Nay|NV[AB|Rec|CounciiMember[Aye|Nay|NV[AB[Rec
ChairmanMendelson)x Henderson x Pinto
Allen x LewisGeorge_| X R White
Bonds x McDuttio x
Felder x Nadeau x
Frumin x Parker x
X-IndicateVote AB ~Absent NV--Present,NotVoting Rec-Recused
CERTIFICATIONRECORD
‘SecretarytotheColne”