B26-0150 • 2025

Residential Building Permit Classification Temporary Amendment Act of 2025

Taxes

Enacted

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

Sponsor: Mendelson
Last action: 2025-06-27
Official status: Official Law
Effective date: Not listed

Plain English Breakdown

The exact effective date depends on mayoral approval and a 30-day congressional review period, though metadata indicates it took effect June 17, 2025.

Temporary Rules for Changing Building Permits to Residential Use

This temporary law in Washington, D.C., allows property owners with building permits for new homes or major repairs to apply for lower residential tax rates before construction is finished.

What This Bill Does

Allows properties with active building permits for constructing a new home or substantially rehabilitating an existing one for non-transient living to be classified as Class 1A (residential) property.
Requires owners to apply and provide complete documentation to the Chief Financial Officer before the tax classification change becomes effective.
Sets rules so that if reclassification happens between October 1 and March 31, the lower residential rate applies for the whole year; if it happens between April 1 and September 30, it applies only for the second half of the year.
Orders officials to reclassify properties back to higher rates and add penalties with interest if the building is not used primarily as a home by permit expiration or within three years.
Gives property owners the right to appeal if their request to change tax classification is denied.

Who It Names or Affects

Property owners in Washington, D.C., who have issued building permits for new residential construction or substantial rehabilitation of existing improvements.
The Chief Financial Officer of the District of Columbia, who reviews applications and manages reclassifications.
Properties currently classified as Class 2, Class 3, or Class 4 that may qualify for Class 1A status under this act.

Terms To Know

Class 1A Property: Real estate used primarily for non-transient residential living that qualifies for a lower tax rate, including properties with permits to build or substantially rehabilitate homes.
Building Permit: Official permission from the government required to start construction of a new home or substantial rehabilitation of an existing one.
Clawback: A rule requiring owners to pay back taxes, plus penalties and interest, if they do not finish their residential project as promised within the allowed time.

Limits and Unknowns

This law is temporary and will expire after 225 days of taking effect.
The tax rate change only applies if the property owner submits a complete application with proper documentation before the new classification takes effect.
Owners must still file for mixed-use classifications separately under existing rules when required.

Bill History

2025-06-27 Council of the District of Columbia LIMS
Law L26-0015, Effective from Jun 17, 2025 Published in DC Register Vol 72 and Page 007299, Expires on Jan 28, 2026
2025-05-05 Council of the District of Columbia LIMS
Transmitted to Congress
2025-05-02 Council of the District of Columbia LIMS
Act A26-0066 Published in DC Register Vol 72 and Page 005339
2025-04-29 Council of the District of Columbia LIMS
Returned from Mayor
2025-04-24 Council of the District of Columbia LIMS
Signed by the Mayor and Enacted with Act Number A26-0066
2025-04-22 Council of the District of Columbia LIMS
Transmitted to Mayor, Response Due on May 06, 2025
2025-04-01 Council of the District of Columbia LIMS
Legislative Meeting
2025-03-07 Council of the District of Columbia LIMS
Notice of Intent to Act on B26-0150 Published in the District of Columbia Register
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
B26-0150 Introduced by Chairman Mendelson at Office of the Secretary

Official Summary Text

Residential Building Permit Classification Temporary Amendment Act of 2025

Current Bill Text

Read the full stored bill text

ENROLLED ORIGINAL
ANACT
D.C. ACT 26-66
INTHE COUNCIL OF THE DISTRICTOF COLUMBIA
APRIL 24, 2025
‘Toamend,onatemporarybasis,section47-813oftheDistrictofColumbiaOfficialCodetoprovideformoretimelyclassificationchangesforcommercialpropertiesthataretobeputtoresidentialuse,toprovideforanapplicationprocesstomakeclassificationchanges,toprovideforappealrightsifsuchapplicationisdenied,andtoprovideforaclawbackintheeventtherealpropertyisnottimelyputtoresidentialuse.

BE ITENACTED BY THE COUNCIL OF THE DISTRICTOF COLUMBIA, Thatthis
actmay be citedasthe“ResidentialBuildingPermitClassificationTemporaryAmendment Act
of2025”.
Sec.2.Section47-813oftheDistrictofColumbiaOfficialCodeisamendedtoreadasfollows:(a)Subsection(c-9)(2)isamendedasfollows:(2)Subparagraph(A)isamendedtoreadasfollows:“4(2\(A)Exceptasotherwiseprovidedinthisparagraphandsubjecttoparagraphs(4)and(5)ofthissubsection,Class1APropertyshallbecomprisedof:
“(i)Residentialrealpropertythatisimprovedanditslegaluseis
fornontransientresidentialdwellingpurposes,andthatisnotClass1BProperty;provided,that
suchpropertymaybeusedtohosttransientguestspursuanttoanunexpiredshort-termrental
licenseendorsementissuedpursuantto§30-201.04;or“@i)Realpropertyoraportionofrealpropertyforwhichabuildingpermithasbeenissued:“()Toconstructanewimprovementforpredominantlynontransientresidentialdwellingpurpose;or(II)Tosubstantiallyrehabilitatethatportionorallofanexistingimprovementforexclusivelynontransientresidentialdwellingpurposes.”.(2)Subparagraph(C)isamendedbystrikingthephrase“designatedas”and
insertingthephrase“designatedsolelyas”initsplace.

ENROLLED ORIGINAL
(b)The lead-inlanguageof subsection(d-2)isamended by strikingthephrase“Class3
PropertyorClass4Property,”andinsertingthephrase“Class2Property,Class3Property,or
Class4 Property,”initsplace.
(c)Anew subsection(d-3)isaddedtoreadasfollows:
“(d-3)(1)IfrealpropertychangesclassificationtoClass1APropertyasdefinedin
subsection(c-9)(2)(A)(ii)ofthissectionduringtheperiod:
“(A) October 1 throughMarch 31 of thetaxyear,thenewly reclassified
Class1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalready
improved or assessedunder § 47-829,shallbe taxedattheClass1A Propertytaxrateforthe
entiretaxyear;or
“(B)April1throughSeptember30ofthetaxyear,thenewlyreclassified
Class1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalready
improved or assessedunder § 47-829,shallbe taxedattheClass 1A Propertytaxrateforthe
secondinstallmentonly.
“(2)TheownershallapplyforachangeofclassificationtoClass1APropertyas
definedinsubsection(c-9)(2)(A)(ii)ofthissectionandshallpromptlyprovidecomplete
documentationina manner prescribedby theChief FinancialOfficertosubstantiateany such
classificationchangebeforeitshallbeeffective.
“(3)A change inclassificationtoClass1A Propertyas definedinsubsection(c-
9)(2)(A)(ii)ofthis sectionshallbe effectivebeginninginthehalftaxyear forwhich application
ismadeunderparagraph(2)ofthissubsection.
“(4)IfchangeinclassificationtoClass1APropertyasdefinedinsubsection(c-
9)(2)(A)(ii)ofthissectionisdeterminedtobeerroneousbecausetherealpropertywasnotputto
predominantlyresidentialuse by theearlierof eithertheissuanceof any new or amended
certificateofoccupancy(temporaryorpermanent)foranypartoftheimprovementthereon,or3
yearsfromissuanceofthebuildingpermit,orthebuildingpermitexpiredandwasnotrenewed
withinoneyear,theChiefFinancialOfficershalllreclassifyandtaxtherealpropertywithout
limitationforeachtaxyearorhalftaxyearinwhichtherealpropertywasimproperlyclassified
asClass1AProperty,subjectonlytosubsection(d-1)(5)(A-i)ofthissection,ifthepropertyis
determinedtobeClass3PropertyorClass4Property,orsubsection(d-2)ofthissection.Inthe
eventofsuchreclassification,penaltyandinterestshallbeaddedbeginningfromthedaythe
correctamountoftaxshouldhavebeenduebutnotpaidifthepropertyhadbeenproperly
classified.
“(5)Within45daysfromthedateofthenoticeofdenialofClass1AProperty
reclassificationunderthissubsection,theowner may petitionforan administrativereviewof the
rescissionordenialand appealfrom afinal determinationthereoftothesame extentasif the
appealwerefiledunder§47-825.01a(d)(2)..
“(6)Notwithstandingthetimelimitationsinparagraphs(4)and(5)ofthis
subsection,theChiefFinancialOfficer,inhisor herdiscretion,may grantan extensionof timeto
2

ENROLLED ORIGINAL
complyorwaivepenaltyandinterestassessedpursuanttoparagraph(4)ofthissubsectiontopreventanunduehardshiptotheowner.“(7)Theprovisionsofthissubsection,subsection(c-9)(2)(A)(ii)ofthissection,
and§47-829shallnotsupersedetherequirementtotimelyfileformixed-useclassificationfortheupcomingtaxyearpursuanttosubsection(f)ofthissection,whentheannualassessmentforsuchupcomingtaxyearismadeunder§47-824andthecertificateofoccupancy(finalor
temporary)wasissued.”.
Sec.3.Applicability.ThisactshallapplyasofApril1,2025.
Sec.4.Fiscalimpactstatement.
The CounciladoptsthefiscalimpactstatementoftheBudget Directorasthefiscalimpact
statementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,approved
October 16,2006 (120 Stat.2038; D.C. OfficialCode § 1-301.47a).
Sec.5.Effectivedate.(a)ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofvetobytheMayor,actionbytheCounciltooverridetheveto)anda30-dayperiodofcongressionalreviewasprovidedinsection602(c)(1)oftheDistrictofColumbiaHomeRuleAct,approved
December24,1973(87Stat.813;D.C.OfficialCode§ 1-206.02(c)(1)).(b)Thisactshallexpireafter225daysofitshavingtakeneffect.
lpi‘hairman
Councilof theDistrictof Columbia

District\ofColumbia
April 24,2025APPROVED

COUNCILOF THEDISTRICTOF COLUMBIA
WASHINGTON,DC,20004

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