D.C. Law 21-268. First-time Homebuyer Tax Benefit Amendment Act of 2016.

D.C. Law 21-268. First-time Homebuyer Tax Benefit Amendment Act of 2016.

AN ACT

To amend the District of Columbia Deed Recordation Tax Act to provide a first-time homebuyer recordation tax rate reduction on the purchase of an eligible property for an individual who has never owned residential real property or an economic interest in a cooperative unit in the District of Columbia, to provide that the recordation tax rate reduction program shall expire 5 years following its implementation, and to require the Mayor to submit a report to the Council on the benefits of providing the recordation tax rate reduction.

BE IT ENACTED BY THE COUNCIL FOR THE DISTRICT OF COLUMBIA, That this act may be cited as the "First-time Homebuyer Tax Benefit Amendment Act of 2016".

Sec. 2. The District of Columbia Deed Recordation Tax Act, approved March 2, 1962 (76 Stat. 11; D.C. Official Code § 42-1101 et seq.), is amended as follows:

Note § 42-1101

(a) Section 301 (D.C. Official Code § 42-1101) is amended by adding new paragraphs (16) and (17) to read as follows:

Amend § 42-1101

"(16) The phrase "first-time District homebuyer" means an individual who has never owned eligible property as the individual's principal residence. The term "first-time District homebuyer" includes an individual who has divorced or separated and who, by a written settlement agreement or court order, did not obtain an ownership interest in a principal residence that had been jointly owned.

Amend § 42-1101

"(17) The phrase "eligible property" means improved residential real property, including an economic interest in a cooperative unit, that qualifies for the homestead deduction provided pursuant to D.C. Official Code § 47-850.".

Note § 42-1103

(b) Section 303 (D.C. Official Code § 42-1103) is amended by adding new subsections (e) and (f) to read as follows:

Amend § 42-1103

"(e)(1) Beginning on or after October 1, 2016, for a first-time District homebuyer who meets the requirements set forth in paragraph (2) of this subsection, the recordation tax shall be reduced to 0.725% in accordance with subsection (c) of this section; except, that the entire benefit of the reduced recordation tax rate shall be applied to the first-time District homebuyer on the HUD-1 settlement statement.

"(2) To be eligible for the reduced recordation tax rate, a first-time District homebuyer shall:

"(A) Provide proof that he or she is a bona fide District of Columbia resident;

"(B) Have a household income no higher than 180% of the Area Median Income as provided by the United States Department of Housing and Urban Development as a direct calculation without taking into account any adjustment;

"(C) Provide proof that the real property to be purchased is eligible property;

"(D) Submit a copy of the deed and a copy of the homestead deduction application for the eligible property; and

"(E) Provide other documentation that the Mayor or the Chief Financial Officer of the District of Columbia considers necessary or appropriate.

"(3) This subsection shall expire 5 years after implementation of the first-time District homebuyer recordation tax rate reduction program.

Amend § 42-1103

"(f) Upon the expiration of the first-time District homebuyer recordation tax rate reduction provided pursuant to subsection (e) of this section, the Mayor shall submit a report to the Council reviewing the impact of the benefits for a first-time District homebuyer allowed under subsection (e) of this section from October 1, 2016 until December 31, 2021. The report shall include:

"(1) An analysis of the recordation tax rate reduction on homeownership in the District;

"(2) The number of households who received the recordation tax rate reduction through December 31, 2021.

"(3) The total number of home sales in the District within the time frame of the recordation tax rate reduction;

"(4) An evaluation of the access to housing for people within the affected income range with the time frame of the recordation tax rate reduction; and

"(5) The overall housing affordability in the District each year that the recordation tax rate reduction was in place.".

Sec. 3. Applicability.

(a) This act shall apply upon the date of inclusion of its fiscal effect in an approved budget and financial plan.

(b) The Chief Financial Officer shall certify the date of the inclusion of the fiscal effect in an approved budget and financial plan, and provide notice to the Budget Director of the Council of the certification.

(c)(1) The Budget Director shall cause the notice of the certification to be published in the District of Columbia Register.

(2) The date of publication of the notice of the certification shall not affect the applicability of this act.

Sec. 4. Fiscal impact statement.

The Council adopts the fiscal impact statement in the committee report as the fiscal impact statement required by section 4a of the General Legislative Procedures Act of 1975, approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a).

Sec. 5. Effective date.

This act shall take effect following approval by the Mayor (or in the event of veto by the Mayor, action by the Council to override the veto), a 30-day period of congressional review as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(2)), and publication in the District of Columbia Register.