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B26-0577 • 2025

Residential Building Permit Classification Emergency Amendment Act of 2026

Residential Building Permit Classification Emergency Amendment Act of 2026

Taxes
Enacted

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

Sponsor
Mendelson
Last action
2026-03-06
Official status
Enacted
Effective date
Not listed

Plain English Breakdown

The official text states this is an emergency act effective for no longer than 90 days following approval.

Residential Building Permit Classification Emergency Amendment Act of 2026

This law allows properties with building permits for new homes or major renovations to be classified as residential sooner, sets rules for tax rates based on when the permit is issued, and requires reclassification if the property is not used as a home within three years.

What This Bill Does

  • Allows real estate with a building permit for constructing a new home or substantially rehabilitating an existing one to be classified as Class 1A Property before construction is finished.
  • Sets tax rates based on when the classification change occurs: properties changing from October 1 through March 31 are taxed at the residential rate for the full year, while those changing from April 1 through September 30 are taxed at that rate only for the second half of the year.
  • Requires owners to apply and provide documentation approved by the Chief Financial Officer before a classification change becomes effective.
  • Orders officials to reclassify properties back to their original status if they are not put to residential use within three years, when a new certificate of occupancy is issued, or if the permit expires without renewal.
  • Adds penalties and interest for taxes owed if a property was incorrectly classified as residential during that time.

Who It Names or Affects

  • Owners of real estate in the District of Columbia who have building permits to construct new homes or substantially rehabilitate existing buildings for residential use.
  • The Chief Financial Officer, who reviews applications and manages tax classifications.
  • Avanti Real Estate Services, LLC, whose specific property tax relief language is simplified by this act.

Terms To Know

Class 1A Property
Real estate used for non-transient residential living that pays a lower tax rate than commercial properties.
Clawback
The process of reclassifying a property and charging back taxes, plus penalties and interest, if the building is not put to its intended use on time.

Limits and Unknowns

  • This act expires after 90 days unless extended by further action.
  • Owners must file for mixed-use classification separately even if they qualify under this new rule.
  • The Chief Financial Officer has discretion to waive penalties only in cases of undue hardship.

Bill History

  1. 2026-03-06 Council of the District of Columbia LIMS

    Act A26-0271 Published in DC Register Vol 73 and Page 003143, Expires on May 31, 2026

  2. 2026-03-03 Council of the District of Columbia LIMS

    Returned from Mayor

  3. 2026-03-02 Council of the District of Columbia LIMS

    Signed by the Mayor and Enacted with Act Number A26-0271, Expires on May 31, 2026

  4. 2026-02-17 Council of the District of Columbia LIMS

    Transmitted to Mayor, Response Due on Mar 03, 2026

  5. 2026-02-03 Council of the District of Columbia LIMS

    Retained by the Council

  6. 2026-02-03 Council of the District of Columbia LIMS

    Legislative Meeting

  7. 2026-02-02 Council of the District of Columbia LIMS

    B26-0577 Introduced by Chairman Mendelson at Office of the Secretary

Official Summary Text

Residential Building Permit Classification Emergency Amendment Act of 2026

Current Bill Text

Read the full stored bill text 
ENROLLED ORIGINAL
AN ACT
D.C. ACT 26-271
INTHE COUNCILOFTHEDISTRICTOF COLUMBIA
MARCH 2,2026
Toamend,onanemergencybasis,section47-813oftheDistrictofColumbiaOfficialCodetoprovideformoretimelyclassificationchangesforcommercialpropertiesthataretobeputtoresidentialuse,toprovideforanapplicationprocesstomakeclassificationchanges,toprovideforappealrightsifsuchapplicationisdenied,andtoprovideforaclawbackintheeventtherealpropertyisnottimelyputtoresidentialuse.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, Thatthis
actmay be citedasthe“ResidentialBuildingPermitClassificationEmergency Amendment Act
of 2026”.
Sec.2.Section47-813ofthe Districtof Columbia OfficialCode isamended asfollows:
(a)Subsection(c-9)(2)isamended as follows:
(1)Subparagraph(A)isamendedtoreadasfollows:
“(2)(A)Exceptasotherwiseprovidedinthisparagraphandsubjecttoparagraphs(4)and(5)ofthissubsection,Class1APropertyshallbecomprisedof:
“(i)Residentialrealpropertythatis improved and itslegaluse is
fornontransientresidentialdwellingpurposes,andthatisnotClass1BProperty;provided,thatsuchpropertymay be usedtohosttransientguestspursuanttoan unexpiredshort-termrental
licenseendorsementissuedpursuantto§30-201.04;or
“(i)Realpropertyoraportionofrealpropertyforwhicha
buildingpermithas been issued:
“()Toconstructanewimprovementforpredominantlynontransientresidentialdwellingpurpose;or
“(I1)To substantiallyrehabilitatethatportionor allof an.
existingimprovementforexclusivelynontransientresidentialdwellingpurposes.”.
(2)Subparagraph(C)isamended by strikingthephrase“designatedas”and
insertingthephrase“designatedsolelyas”initsplace.

ENROLLED ORIGINAL
(b)Thelead-inlanguageofsubsection(d-2)isamendedbystrikingthephrase“Class3PropertyorClass4Property,”andinsertingthephrase“Class2Property,Class3Property,orClass4Property,”initsplace.
(©)A newsubsection(d-4)isaddedtoreadasfollows:
“(¢-4)(1)IfrealpropertychangesclassificationtoClass1APropertyasdefinedinsubsection(¢-9)(2)(A)Gi)duringtheperiod:
“(A)October1throughMarch31ofthetaxyear,thenewlyreclassifiedClass1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalreadyimprovedorassessedunder§47-829,shallbetaxedattheClass1APropertytaxratefortheentiretaxyear;or
“(B)April|throughSeptember30ofthetaxyear,thenewlyreclassifiedClass1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalreadyimprovedorassessedunder§47-829,shallbetaxedattheClass1APropertytaxrateforthesecondinstallmentonly.
“(2)TheownershallapplyforachangeofclassificationtoClass1APropertyasdefinedinsubsection(c-9)(2)(A)(ii)ofthissectionandshallpromptlyprovidecompletedocumentationinamannerprescribedbytheChiefFinancialOfficertosubstantiateanysuchclassificationchangebeforeitshallbeeffective.
“(3)AchangeinclassificationtoClass1APropertyasdefinedinsubsection(c-9)(2)(A)()ofthissectionshallbeeffectivebeginninginthehalftaxyearforwhichapplicationismadeunderparagraph(2)ofthissubsection.
“(4)LfchangeinclassificationtoClass1APropertyasdefinedinsubsection(c-9}(2)(A)Gi)ofthissectionisdeterminedtobeerroneousbecausetherealpropertywasnotputtopredominantlyresidentialusebytheearlierofeithertheissuanceofanyneworamendedcertificateofoccupancy(temporaryorpermanent)foranypartoftheimprovementthereon,or3yearsfromissuanceofthebuildingpermit,orthebuildingpermitexpiredandwasnotrenewedwithinoneyear,theChiefFinancialOfficershallreclassifyandtaxtherealpropertywithoutlimitationforeachtaxyearorhalftaxyearinwhichtherealpropertywasimproperlyclassifiedasClass1AProperty,subjectonlytosubsection(d-1)(5)(A-i)ofthissection,ifthepropertyisdeterminedtobeClass3PropertyorClass4Property,orsubsection(d-2)ofthissection.Intheeventofsuchreclassification,penaltyandinterestshallbeaddedbeginningfromthedaythecorrectamountoftaxshouldhavebeenduebutnotpaidifthepropertyhadbeenproperlyclassified.
“(5)Within45daysfromthedateofthenoticeofdenialofClass1APropertyreclassificationunderthissubsection,theownermaypetitionforanadministrativereviewoftherescissionordenialandappealfromafinaldeterminationthereoftothesameextentasiftheappealwerefiledunder§47-825.01a(d)(2).
(6)Notwithstandingthetimelimitationsinparagraphs(4)and(5)ofthissubsection,theChiefFinancialOfficer,inhisorherdiscretion,maygrantanextensionoftimeto
2

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.Section2(a)oftheAvantiRealEstateServices,LLCRealPropertyTaxReliefEmergencyActof2025,effectiveDecember3,2025(D.C.Act26-213;72DCR 13682),isamendedbystrikingthephrase“AvantiRealEstateServices,LLC;provided,thatthePropertyisoccupiedbyAvantiRealEstateServices,LLCandisusedtofurtherthepurposesofprovidingrealestateandbrokerageservices,specializingincreatinggenerationalwealththroughhomeownership,employingDistrictresidents,andprovidingeducationandtrainingforemploymentopportunitiesandcareerswithintherealestateindustry”andinsertingthephrase“AvantiRealEstateServices,LLC”initsplace.
See.4.Section2(a)oftheAvantiRealEstateServices,LLCRealPropertyTaxReliefTemporaryActof2025,enactedonDecember19,2025(D.C.Act26-237;73DCR68),isamendedbystrikingthephrase“AvantiRealEstateServices,LLC;provided,thatthePropertyisoccupiedbyAvantiRealEstateServices,LLCandisusedtofurtherthepurposesofprovidingrealestateandbrokerageservices,specializingincreatinggenerationalwealththroughhomeownership,employingDistrictresidents,andprovidingeducationandtrainingforemploymentopportunitiesandcareerswithintherealestateindustry”andinsertingthephrase“AvantiRealEstateServices,LLC”initsplace.
Sec.5.Applicability.
ThisactshallapplyasofJanuary28,2026.
Sec.6.Fiscalimpactstatement.
‘TheCounciladoptsthefiscalimpactstatementof theBudget Directorasthefiscalimpact
statementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,approved
October 16,2006 (120 Stat.2038; D.C. OfficialCode§ 1-301.47a).
Sec.7.Effectivedate,
ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofvetobytheMayor,actionbytheCounciltooverridetheveto),andshallremainineffectfornolongerthan90days,asprovidedforemergencyactsoftheCounciloftheDistrictofColumbiainsection

ENROLLED ORIGINAL
412(a)of the DistrictofColumbia Home RuleAct,approvedDecember 24, 1973 (87Stat.788;
D.C. OfficialCode § 1-204.12(a)).
‘hairman
Councilofthe Districtof Columbia

APPROVED
MARCH 2, 2026

COUNCILOF THEDISTRICTOF COLUMBIA
WASHINGTON,DC,20004

[IITEMONCONSENTCALENDAR
[xyacrion FinalReading
[X]VOTEDATE February3,2026
{X]VOICEVOTE ‘Approved
RECORDEDVOTEONREQUEST
ABSENT
[]ROLLCALLVOTE—Resuit
CouncMember [Aye|Nay|Nv[AB[Rec|CounciMember[Aye|Nay|Nv [AB[Ree]CouncMember[Aye[Nay[NV[AB[ReeChairmanMendelson]X Frumin x Pinto
Allen x Henderson x R.White
Bonds x LewisGeorge_| x T.White
Doni x Nadeau x
Felder x Parker x
X-IndicateVote ‘AB~Absent NV.Present,NotVoting Rec-Recused
CERTIFICATIONRECORD
210° We‘SecretaryTotheCounc Date