Buying or selling in Georgetown often means working with large numbers and tight timelines. One line item that can surprise even seasoned clients is D.C.’s transfer and recordation taxes. You want a clear picture before you sign, not a rush to decode your Closing Disclosure the week of settlement. In this guide, you’ll learn what these taxes are, how they’re calculated, who typically pays in the District, how they appear on your closing statement, and smart ways to budget and negotiate around them. Let’s dive in.
D.C. transfer and recordation taxes explained
In most District of Columbia real estate closings, two separate taxes apply.
- Transfer tax: a tax on the conveyance of real property when a deed is transferred.
- Recordation tax: a tax due when a deed or mortgage is recorded with the District.
These taxes matter in Georgetown because they are percentage-based. On premium properties, the dollar amounts scale with price and loan size, so they can materially affect your net proceeds as a seller or your cash-to-close as a buyer. The D.C. Council sets the rules, and the Office of Tax and Revenue administers them, so exact rates and exemptions can change. Your title company will calculate the precise amounts for your contract.
How the calculations work
The core math is straightforward. The title company applies current D.C. rates to the appropriate tax base for your transaction.
Transfer tax formula
- General formula: Transfer tax = Transfer tax rate × Sale price (or other statutory base).
- The sale price is usually the consideration stated in the contract and deed.
Recordation tax formula
- General formula: Recordation tax = Recordation tax rate × Mortgage amount (or other statutory base if no new mortgage is recorded).
- If you purchase with a mortgage, the recordation tax commonly applies to your loan amount. If you buy all cash and only record the deed, the recordation tax may be based on the consideration. Your title company applies the District’s rules to your specific scenario.
Mortgage, cash, and special structures
- Mortgage purchase: Plan for recordation tax tied to the new loan plus smaller fixed recording fees.
- All-cash purchase: The deed still must be recorded, so ask your title company how recordation taxes and fees will be assessed.
- Entity or trust purchase: The tax base and documentation can differ for corporations, LLCs, partnerships, and certain trusts. Title, your attorney, and the lender will advise on the correct treatment.
Who typically pays in D.C.
Allocation is negotiable and should be spelled out in your contract. That said, here is common D.C. practice:
- Sellers commonly pay the transfer tax.
- Buyers commonly pay the recordation tax tied to their mortgage and deed recording, plus recording fees.
In Georgetown, where purchase prices are often high, it’s normal to negotiate who pays what. You might see offers where the seller covers transfer tax to keep terms clean, or buyers request a seller credit to offset recordation costs. What matters is that your contract is explicit so there are no surprises at closing.
Exemptions and credits to know
D.C. law provides exemptions and special treatments for certain transfers. Availability depends on your facts, and documentation is required at closing. Common categories include:
- Transfers between spouses or incident to divorce.
- Transfers to or from a revocable trust or certain trusts where the grantor is the beneficiary.
- Transfers by operation of law, such as foreclosure or court-ordered transfers.
- Transfers for no consideration or nominal consideration in specific circumstances.
- Transfers involving government entities or qualified nonprofits.
- First-time homebuyer programs or local incentives that may offer reductions or credits.
Because rules change, ask your title company early about eligibility and the forms you’ll need, such as marriage certificates, trust instruments, or corporate resolutions.
High-value and entity transfers
Premium Georgetown properties sometimes involve more complex ownership structures. Be aware that:
- Transfers to or from entities can carry different rates or documentation requirements.
- Certain high-value or entity-level transactions may trigger additional reporting.
- Estate planning or 1031-like strategies have specialized rules and should be reviewed by your attorney.
What you will see at closing
Your settlement statement will itemize these charges so you understand where every dollar goes.
Seller side (commonly)
- Transfer tax: Listed as “D.C. transfer tax” or “state/local transfer tax,” paid from the seller’s proceeds unless the contract says otherwise.
Buyer side (commonly)
- Recordation tax on the new mortgage: Shown under “Recording/transfer charges” or “Mortgage recording tax.”
- Deed recording and documentary fees: Smaller, fixed-dollar amounts separate from the tax itself.
- Title insurance premium and lender fees: Not taxes, but they appear near the recording items on your Closing Disclosure.
Timing and payment mechanics
- These taxes are collected by the settlement agent at closing and remitted to the District.
- If taxes or recording fees aren’t paid, the deed or mortgage cannot be recorded, which can delay or derail the transaction.
Example you can model
Use the framework below to estimate impact. This is an example only. Ask your title company to apply current D.C. rates to your numbers.
- Sale price = P
- Buyer’s mortgage amount (new loan) = M
- Transfer tax = P × R_t (R_t = transfer tax rate)
- Recordation tax = M × R_r (R_r = recordation tax rate)
- Total tax-related closing costs at settlement = (P × R_t) + (M × R_r) + fixed recording fees
Interpretation for Georgetown: Because both taxes are percentage-based, larger prices and loans produce higher tax amounts. On multimillion-dollar sales, these figures can reach into the tens of thousands. Get an itemized estimate before you finalize pricing, financing, or credits.
Budgeting and negotiation tips
A proactive plan reduces friction and protects your net.
- Request early estimates: Ask your title company for an “estimated closing statement” using your actual contract price and intended loan amount. If you’re selling, this helps you calculate net proceeds; if you’re buying, it clarifies cash-to-close.
- Plug in worst-case numbers: Because rates and terms can change, model a conservative scenario so you’re covered.
- State allocation in writing: Use precise language in the contract, such as “Seller to pay D.C. transfer tax” and “Buyer to pay recordation tax and recording fees.” Avoid vague phrasing.
- Consider credits: Instead of changing who pays which line item, you can negotiate a general seller credit that offsets the buyer’s closing costs, subject to lender rules.
- Coordinate with your lender: Your Closing Disclosure will reflect mortgage-related taxes and fees. Confirm timing and any caps on credits.
- Document exemptions early: If you intend to claim an exemption, assemble required documents before the title company prepares final forms.
Work with the right team
The most reliable way to nail the numbers and avoid last-minute surprises is to surround yourself with experienced professionals.
- Title company: Prepares the HUD-1 or Closing Disclosure, computes exact taxes and fees, collects and remits them, and ensures the deed and mortgage are properly recorded.
- Lender: Produces the Closing Disclosure with buyer-side costs. Coordinate on credits and timing.
- Attorney: For complex ownership structures, trust or entity transfers, estate situations, or nuanced exemptions, a D.C.-licensed real estate or tax attorney can save time and reduce risk.
- D.C. Office of Tax and Revenue: The authoritative source for current rates, forms, and procedures. Check with OTR through your title company for the latest guidance.
When you understand how transfer and recordation taxes work in Washington, you can write a cleaner offer, budget with confidence, and negotiate with clarity. If you’re planning a Georgetown move, the right preparation keeps the focus where it belongs: protecting your value and getting you to the finish line smoothly.
Ready to discuss your specific numbers and strategy for a Georgetown sale or purchase? Connect with the senior-led team at The Martin & Jeff Group for a confidential, detailed plan tailored to your goals.
FAQs
Who pays D.C. transfer and recordation taxes in Georgetown?
- In common D.C. practice, sellers pay the transfer tax and buyers pay the recordation tax and recording fees, but the contract controls and parties can negotiate different allocations.
How are these D.C. taxes calculated for a home purchase?
- The transfer tax is generally a percentage of the sale price, and the recordation tax is generally a percentage of the new mortgage amount or the consideration if no mortgage is recorded, with exact calculations performed by your title company.
Are there exemptions for first-time buyers or family transfers?
- D.C. provides exemptions and potential reductions for specific situations such as certain first-time buyer programs, transfers between spouses, and transfers to qualifying trusts; eligibility and documentation are required and should be confirmed with your title company.
How much should I budget for a premium Georgetown home?
- Because both taxes are percentage-based, the dollar amount scales with price and loan size; ask your title company for an itemized estimate using your contract price and intended mortgage.
Where will these taxes appear on my Closing Disclosure?
- Transfer tax typically appears on the seller side as “D.C. transfer tax,” while the buyer side shows “recordation tax” for the mortgage and separate fixed recording fees, alongside title and lender charges.
Can seller concessions cover these taxes?
- Yes, parties often use seller credits to offset buyer closing costs including recordation tax, subject to lender limits; spell out credits and tax allocation clearly in the contract.
What documentation is needed to claim an exemption?
- You will need supporting documents tied to your exemption type, such as marriage certificates, trust instruments, or corporate resolutions, provided to the title company before closing.
How do I get exact, up-to-date figures for my contract?
- Request a preliminary HUD-1 or estimated settlement statement from your title company and coordinate with your lender; they will apply current D.C. rules to your specific price, financing, and any exemptions.
