Real Estate Taxes in the DC Metro Area: What Homeowners and Investors Need to Know

Real estate taxes are an important consideration for anyone looking to buy property or invest in real estate.

For those in the Washington, D.C. metro area, understanding the region’s tax landscape is crucial, as the area encompasses multiple jurisdictions with different tax rates, rules, and regulations. Whether you are already a homeowner, a prospective buyer, or an investor, knowing how property taxes work can help in financial decisions regarding property ownership.

Real estate taxes are local taxes levied on the value of land and buildings. They are collected by city or county governments and are a primary funding source for local services such as schools, public safety, roads, and parks. Property taxes are calculated on the assessed value of the property and the tax rate set by the particular taxing jurisdiction.

In our region, there are distinct tax regimes (e.g. state, county, and city) to consider since the area spans multiple jurisdictions — Washington, D.C., suburban Maryland, and Northern Virginia. Each jurisdiction has its own approach to real estate taxation, which can lead to significant differences in tax rates and policies. Generally, across our local jurisdictions there is a process for assessing the value of real property and then applying a tax rate, which is typically set by the jurisdictional government each spring.

Real Estate Taxes in Washington, D.C.

Washington, D.C., has its own independent property tax system. The city assesses the fair market value of the property, and imposes taxes on the property to help fund services, including public education, emergency services, and infrastructure.

Washington, D.C., imposes different tax rates on residential property and commercial property. As of 2024, the residential real estate tax rate in D.C. was $0.85 per $100 of assessed value. This means that for every $100 of assessed value, homeowners paid $0.85 in property taxes. The tax rate for commercial properties in D.C. is higher than for residential properties, standing at $1.85 per $100 of assessed value. This rate applies to properties used for business purposes.

Real Estate Taxes in Maryland (Suburban DC)

In Maryland, property values on residential property are typically assessed every three years. The assessments are conducted at the local jurisdictional level and overseen by the State Department of Assessments and Taxation (SDAT). The local governments of Montgomery and Prince George’s counties establish their own tax rates applied to each $100 of assessed value. Montgomery County is one of the largest and most populous counties in Maryland, and its real estate tax rates are among the highest in the state. As of 2024, the real property tax rate in Montgomery County was $1.04 per $100 of assessed value for residential properties.

In addition to the standard real estate tax, Montgomery County property owners may also be subject to a fire and rescue tax for properties located in certain districts. This tax is typically a small percentage of the property’s assessed value and is used to fund local emergency services.

Prince George’s County has a slightly different property tax rate. As of 2024, the real estate tax rate in Prince George’s County was $1.10 per $100 of assessed value for residential properties. Much like Montgomery County, Prince George’s also levies additional taxes for specific services, such as fire and emergency services, and may have different rates for commercial properties. It is prudent for prospective property owners to check with the local tax authority for any additional taxes that may apply.

Real Estate Taxes in Virginia (Northern Virginia)

In Virginia, real estate taxes are imposed on the fair market value of real estate as of January of each calendar year. Tax rates vary by locality. Some of the major Northern Virginia counties include Arlington, Fairfax, and Loudoun, in addition to the independent City of Alexandria. Like the other jurisdictions in the metro area, each county in Virginia establishes its own tax rate and to some degree its tax regulations.

Arlington County is known for its proximity to Washington, D.C., and is home to many government employees and young professionals. As of 2024, the real estate tax rate in Arlington County was $1.013 per $100 of assessed value. Arlington has an additional stormwater tax, which is designed to fund the local stormwater management system. The amount varies depending on the size of the property and its impact on the county’s stormwater infrastructure.

Fairfax County, the largest jurisdiction in Virginia by population, has a higher real estate tax rate than Arlington County. The 2024 tax rate in Fairfax is $1.14 per $100 of assessed value for residential properties. Like other localities, Fairfax may have additional taxes for special services such as fire protection or emergency services, depending on the specific area within the county. The City of Alexandria, an independent city within Virginia, has a tax rate that is distinct from the adjacent counties. As of 2024, the real estate tax rate for residential properties in Alexandria was $1.11 per $100 of assessed value.

Loudoun County’s tax rate for 2024 was $1.085 per $100 of assessed value. Loudoun historically provided certain exemptions for different land uses, such as agricultural, but residential development continues to decrease the instances of these exemptions.

Property Tax Appeals and Exemptions

If you feel that your property’s assessment is too high in any of the jurisdictions in the DC metro area, you have the right to appeal the assessment. Each jurisdiction has a formal process for appealing property tax assessments, and it usually involves providing evidence, such as recent appraisals or sales of similar properties.

Additionally, some jurisdictions offer property tax exemptions and credits for qualifying homeowners. For example, D.C. offers a homestead deduction that allows homeowners to exempt a portion of their property’s assessed value, reducing their overall tax burden. Similarly,

Maryland and Virginia offer various tax relief programs for seniors, disabled persons, and certain Veterans.

Local property tax payments are due twice each year, although the due dates vary from jurisdiction to jurisdiction. If a property is encumbered by a mortgage, the mortgage company may require 1/12th of the annual tax liability be included in the monthly payment, which would be placed in escrow, allowing the mortgage company to make the semi-annual tax payment to the appropriate jurisdiction. Most mortgages are set up to require a tax escrow payment, though a conventional mortgage may not require a tax escrow if the loan amount falls below a specific loan-to-value.

Taxes help fund the services in our communities and it’s important to understand how they are collected and what they are used for. If you’re interested in understanding how taxes will affect your home affordability scenario, reach out to me or anyone on the Atlantic Coast Mortgage team to learn more.

Brian Bonnet - Atlantic Coast Mortgage

Brian Bonnet

SVP, Sr. Loan Officer, NMLS: 224811

Atlantic Coast Mortgage, NMLS: 643114

O: (703) 766-6702 | M: (703) 304-0188

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