B26-0578 • 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: 2026-05-21
Official status: Official Law
Effective date: Not listed

Plain English Breakdown

The official text states the law expires 225 days after taking effect, but the exact start date depends on mayoral approval and a congressional review period.

Temporary Rules for Changing Building Permit Tax Classes to Residential

This temporary law in Washington, D.C., allows property owners with building permits for new homes or major renovations to be taxed as residential sooner than usual.

What This Bill Does

Allows properties with active building permits for constructing a new home or substantially rehabilitating an existing one for non-transient residential use to be classified as Class 1A (residential) before construction is finished.
Sets rules so that if a property changes classification between October and March, it gets the lower tax rate for the whole year; changes made between April and September get the lower rate only for the second half of the year.
Requires owners to submit complete documentation approved by the Chief Financial Officer (CFO) before the new classification takes effect.
Orders officials to reclassify properties back to higher tax rates and add penalties if the home is not put to residential use within three years, or sooner if a certificate of occupancy is issued for non-residential use.
Gives property owners the right to appeal a denial of their classification change request.

Who It Names or Affects

Property owners in Washington, D.C., who hold building permits for new residential construction or substantial rehabilitation.
The Chief Financial Officer's office, which must review applications and manage tax reclassifications.
Avanti Real Estate Services, LLC, by removing specific conditions about how their property is used to qualify for a separate tax relief law.

Terms To Know

Class 1A Property: Real estate taxed at the lowest rate because it is used primarily as a permanent home, not for short-term rentals or business purposes. This now includes properties with permits to build new homes or substantially rehabilitate existing ones.
Clawback: The process where officials reclassify property back to higher tax rates and add penalties if the owner fails to finish building a residential property on time.

Limits and Unknowns

This law is temporary and will expire exactly 225 days after it takes effect.
Owners must file for mixed-use classification separately if their property has both business and home uses, as this act does not replace that requirement.

Bill History

2026-05-21 Council of the District of Columbia LIMS
Law Number L26-0119 Effective from May 21, 2026, Expires on Jan 01, 2027
2026-04-09 Council of the District of Columbia LIMS
Transmitted to Congress
2026-04-03 Council of the District of Columbia LIMS
Act A26-0286 Published in DC Register Vol 73 and Page 005745
2026-03-31 Council of the District of Columbia LIMS
Returned from Mayor
2026-03-30 Council of the District of Columbia LIMS
Signed by the Mayor and Enacted with Act Number A26-0286
2026-03-17 Council of the District of Columbia LIMS
Transmitted to Mayor, Response Due on Mar 31, 2026
2026-03-03 Council of the District of Columbia LIMS
Legislative Meeting
2026-02-13 Council of the District of Columbia LIMS
Notice of Intent to Act on B26-0578 Published in the District of Columbia Register
2026-02-03 Council of the District of Columbia LIMS
Retained by the Council
2026-02-03 Council of the District of Columbia LIMS
Legislative Meeting
2026-02-02 Council of the District of Columbia LIMS
B26-0578 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.
AN ACT
D.C. ACT 26-286
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA.
MARCH 30, 2026
Toamend,onatemporarybasis,section47-813oftheDistrictofColumbiaOfficialCodetoprovideformoretimelyclassificationchangesforcommercialpropertiesthataretobeputtoresidentialuse,toprovideforanapplicationprocesstomakeclassificationchanges,toprovideforappealrightsifsuchapplicationisdenied,andtoprovideforaclawbackintheeventtherealpropertyisnottimelyputtoresidentialuse.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, Thatthis
actmaybecitedasthe“ResidentialBuildingPermitClassificationTemporaryAmendmentAct
of 2026”.
Sec.2.Section47-813oftheDistrictofColumbiaOfficialCodeisamendedasfollows:(a)Subsection(c-9)(2)isamendedasfollows:
(1)Subparagraph(A)isamendedtoreadasfollows:
“(2)(A)Exceptasotherwiseprovidedinthisparagraphandsubjecttoparagraphs
(4)and(5)ofthissubsection,ClassIAPropertyshallbecomprisedof:
“(i)Residentialrealpropertythatisimprovedanditslegaluseisfornontransientresidentialdwellingpurposes,andthatisnotClass1BProperty;provided,thatsuchpropertymaybeusedtohosttransientguestspursuanttoanunexpiredshort-termrentallicenseendorsementissuedpursuantto§30-201.04;or
“(i)Realpropertyoraportionofrealpropertyforwhichabuildingpermithasbeenissued:
“(D)Toconstructanewimprovementforpredominantlynontransientresidentialdwellingpurpose;or
“(U)Tosubstantiallyrehabilitatethatportionorallofanexistingimprovementforexclusivelynontransientresidentialdwellingpurposes.”
(2)Subparagraph(C)isamendedbystrikingthephrase“designatedas”andinsertingthephrase“designatedsolelyas”initsplace.
1
ENROLLED ORIGINAL
(b)Thelead-inlanguageofsubsection(d-2)isamendedbystrikingthephrase“Class3PropertyorClass4 Property,”andinsertingthephrase“Class2Property,Class3Property,orClass4Property,”initsplace.
(©)Anewsubsection(d-4)isaddedtoreadasfollows:
“(d-4)(1)IfrealpropertychangesclassificationtoClass1APropertyasdefinedinsubsection(¢-9)(2)(A)(i)ofthissectionduringtheperiod:
“(A)OctoberIthroughMarch31ofthetaxyear,thenewlyreclassifiedClass1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalreadyimprovedorassessedunder§47-829,shallbetaxedattheClass1APropertytaxratefortheentiretaxyear;or

“(B)April1throughSeptember30ofthetaxyear,thenewlyreclassified
Class1AProperty,ortheportionthereofusedexclusivelyforresidentialpurposesifalready
improvedorassessedunder§47-829,shallbetaxedattheClass1APropertytaxrateforthe
secondinstallmentonly.
“(2)TheownershallapplyforachangeofclassificationtoClass1APropertyas
definedinsubsection(c-9)(2)(A)(ii)ofthissectionandshallpromptlyprovidecomplete
documentationina manner prescribedby theChiefFinancialOfficertosubstantiateany such
classificationchange beforeitshallbe effective.
“(3)A changeinclassificationtoClass1APropertyasdefinedinsubsection(c-
9)(2)(A)(ii)ofthissectionshallbeeffectivebeginninginthehalftaxyearforwhichapplication
ismade underparagraph(2)of thissubsection.
“(4)Ifchange inclassificationtoClass1A Propertyasdefinedinsubsection(c-
9)(2)(A)(ii)ofthissectionisdeterminedtobeerroneousbecausetherealpropertywasnotputto
predominantlyresidentialuse by theearlierof eithertheissuanceof any new oramended
certificateof occupancy (temporaryor permanent)forany partof theimprovement thereon,or 3
yearsfromissuanceofthebuildingpermit,orthebuildingpermitexpiredandwasnotrenewed
withinone year,theChiefFinancialOfficershallreclassifyand taxtherealpropertywithout
limitationforeachtaxyearorhalftaxyearinwhichtherealpropertywasimproperlyclassified
asClass1AProperty,subjectonlytosubsection(d-1)(5)(A-i)ofthissection,ifthepropertyis
determinedto be Class3 Propertyor Class4 Property,or subsection(d-2)of thissection.Inthe
eventofsuchreclassification,penaltyandinterestshallbeaddedbeginningfromthedaythe
correctamountoftaxshouldhavebeenduebutnotpaidifthepropertyhadbeenproperly
classified.
“(5)Within45daysfromthedateofthenoticeofdenialofClass1AProperty
reclassificationunderthissubsection,theowner may petitionforan administrativereviewof the
rescissionor denialand appealfrom afinal determinationthereofto thesame extentasif the
appealwerefiledunder§47-825.01a(d)(2).
*(6)Notwithstandingthetimelimitationsinparagraphs(4)and(5)ofthis
subsection,theChiefFinancialOfficer,inhisor herdiscretion,may grantan extensionof timeto
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ENROLLED ORIGINAL.
complyorwaivepenaltyandinterestassessedpursuanttoparagraph(4)ofthissubsectiontopreventanunduehardshiptotheowner.
“(7)Theprovisionsofthissubsection,subsection(c-9)(2)(A)(ii)ofthissection,and§47-829shallnotsupersedetherequirementtotimelyfileformixed-useclassificationfortheupcomingtaxyearpursuanttosubsection(f)ofthissection,whentheannualassessmentforsuchupcomingtaxyearismadeunder§47-824andthecertificateofoccupancy(inalortemporary)wasissued.”.
Sec.3.Section2(a)of the AvantiReal EstateServices,LLC Real PropertyTax Relief
Emergency Actof 2025, effectiveDecember 3,2025 (D.C.Act 26-213;72 DCR 13682),is
amended by strikingthephrase“AvantiReal EstateServices,LLC; provided,thatthePropertyis
occupiedbyAvantiRealEstateServices,LLCandisusedtofurtherthepurposesofproviding
realestateandbrokerageservices,specializingincreatinggenerationalwealththrough
homeownership,employingDistrictresidents,andprovidingeducationandtrainingfor
employment opportunitiesand careerswithintherealestateindustry”and insertingthephrase
“AvantiReal EstateServices,LLC” initsplace.
Sec.4,Section2(a)oftheAvantiRealEstateServices,LLCRealPropertyTaxRelief‘TemporaryActof2025,effectiveFebruary12,2026(D.C.Law26-93;73DCR68),isamendedbystrikingthephrase“AvantiRealEstateServices,LLC;provided,thatthePropertyisoccupiedbyAvantiRealEstateServices,LLCandisusedtofurtherthepurposesofprovidingrealestate
andbrokerageservices,specializingincreatinggenerationalwealththroughhomeownership,employingDistrictresidents,andprovidingeducationandtrainingforemploymentopportunities
andcareerswithintherealestateindustry”andinsertingthephrase“AvantiRealEstateServices,LLC”initsplace.
Sec.5.Fiscalimpactstatement.
The Counciladoptsthefiscalimpactstatementof theBudget Directorasthefiscalimpact
statementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,approved
October 16,2006 (120 Stat.2038; D.C. OfficialCode § 1-301.47a).
Sec.6.Effectivedate.
(a)ThisactshalltakeeffectfollowingapprovalbytheMayor(orintheeventofvetobytheMayor,actionbytheCounciltooverridetheveto)anda30-dayperiodofcongressional
ENROLLED ORIGINAL.
review as provided in section602(c)(1)ofthe Districtof Columbia Home Rule Act,approved
December24,1973(87Stat.813;D.C.OfficialCode§1-206.02(c)(1)).
(b)Thisactshallexpireafter225daysofitshavingtakeneffect.
‘rman
Councilof theDistrictof Columbia

DistrictofColuntbiaAPPROVED
MARCH 30, 2026

DocketNo,B26-0578
[]ITEMONCONSENTCALENDAR,
COUNCILOF THEDISTRICTOF COLUMBIA
WASHINGTON,DC,20004

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