The short answer
At today's Washington DC prices and rents, owning overtakes renting in year 8.
Fold in the District's recordation tax, which our standard model leaves out, and it becomes year 9.
The thing worth understanding about this page is that the District is the cheap part of its own metro, and almost every published figure about "Washington DC property taxes" is describing the metro rather than the District. The Census-derived rate for this metro is 0.92%. A buyer inside the District pays 0.73% — the third-lowest effective rate of the twelve metros we cover, behind only Phoenix and Denver.
| Input | Value | Source |
|---|---|---|
| Typical home value | $625,503 | Zillow Home Value Index (ZHVI), single-family homes only, smoothed & seasonally adjusted (Metro_zhvi_uc_sfr_tier_0.33_0.67_sm_sa_month.csv) (July 2026) |
| Typical single-family rent | $3,358 / month | Zillow Observed Rent Index (ZORI), single-family residences, smoothed (Metro_zori_uc_sfr_sm_month.csv) (July 2026) |
| Effective property-tax rate | 0.73% | The District assesses residential property at 100% of market value and revalues it every year, so a buyer's basis is the price paid, with no estimation. A house is Class 1B — residential with no more than two dwelling units — taxed at $0.85 per $100 of assessed value on the first $2.558 million, and only the excess above that at $1.00. The homestead deduction removes $91,950 of assessed value from an owner-occupier's bill in tax year 2026. On a $625,503 purchase that is ($625,503 − $91,950) x 0.85% = $4,535 a year — 0.7251%, rounded to 0.73% to match the precision we use elsewhere. The District's own published saving for the deduction, $781.58, is exactly $91,950 x 0.85%, which confirms both figures independently of this arithmetic. The residential trash-collection credit is not netted off here because it does not apply to a house the District collects from: it is for condominium, homeowner-association and cooperative units that pay for their own pickup. Why not the Census ratio: Two things separate the survey's taxpayer from this page's, and the larger one is geography. The 0.92% the ACS reports is struck over the Washington-Arlington-Alexandria CBSA, which spans four states, and the District is the *cheap* part of its own metro: Fairfax County levies $1.1225 per $100, Arlington $1.033 and Alexandria $1.135, against the District's $0.85, and Maryland's Montgomery and Prince George's both sit above it too. That is the same failure mode as Chicago's, in the same direction. Underneath it there is also a real incumbent cap: D.C. Code section 47-864 holds a homesteaded property's taxable assessment to 110% of the prior year's, and that credit does not survive a sale — it terminates at the end of the half tax year in which the interest transfers, so a buyer starts uncapped at full market value while a long-tenured neighbour does not. Milder than Proposition 13's 2% or Florida's 3%, but the same mechanism. Applying the CBSA ratio to a District purchase would overcharge a buyer by about $1,220 a year. For the record, that ratio is 0.92% — $5,082 median taxes paid ÷ $553,000 median home value for CBSA 47900, per US Census Bureau, American Community Survey — tables B25103 (median real estate taxes paid) and B25077 (median home value), metro level (2023 5-year estimates).DC Office of Tax and Revenue, Real Property Tax Rates (Class 1B residential, $0.85 per $100 of assessed value on the first $2.558 million); homestead deduction of $91,950 for tax year 2026 per OTR's Homestead/Senior Citizen Deduction schedule; assessment cap per D.C. Code section 47-864 (tax year 2026) |
| Homeowner's insurance | $1,545 / year | District of Columbia County. This is the one page where no geography factor is needed, because the regulator's geography and the page's geography are the same jurisdiction: the NAIC reports the District of Columbia as its own row, and this page prices a District address. So we publish the NAIC's 2023 District of Columbia HO-3 average of $1,545 — written premium over written exposures — exactly as it stands, with no CBSA-to-state scaling of the kind Seattle, Pittsburgh, Los Angeles, Chicago, Phoenix, Atlanta and Philadelphia each apply. The level is a 2023 figure, the most recent written data the NAIC publishes, so it trails the 2026 price and rent on the rest of this page. On the one series where the same thing can be measured, Texas, written premiums rose 25% between 2023 and 2025. Treat this as a floor. It is also worth saying what a geography factor would have done here, because it points the same way as this page's tax section: quoted at a fixed $300,000 of coverage, the District's own ZIP codes average $1,355 against $1,716 across the full four-state CBSA. The District is the cheap part of its own metro on insurance as well as on tax, so scaling the NAIC figure by a metro-wide ratio would have moved it away from a District buyer rather than toward one. This page previously published $1,716, a quoted premium from a rate-comparison sample at a fixed $300,000 of coverage. Quotes run above what insurers actually write, so we moved to the written figure.NAIC, Dwelling Fire, Homeowners Owner-Occupied, and Homeowners Tenant and Condominium/Cooperative Unit Owner's Insurance Report: Data for 2023 (published July 2026), Table 4 — average premium by policy form, HO-3, written premium divided by written exposures. Counties per US Census Bureau / OMB, Core Based Statistical Area delineation — central counties of each CBSA (July 2023); the quoted premium it replaced per Insurance.com (Quadrant Information Services) average annual homeowner's premium by ZIP code — $300,000 dwelling coverage, $300,000 liability, $1,000 deductible, 2% hurricane deductible in Florida; averaged over the CBSA's central counties and weighted by owner-occupied units (August 2026) (2023 data year) |
Why Washington DC lands in year 8
This page is a tug-of-war between a high price and unusually light carrying costs, and the price wins slowly.
The price side. At $625,503 against $3,358 a month, the price-to-rent ratio is 15.5 — the third-highest we cover, behind Los Angeles and Seattle. Month one is $4,196 to own against $3,373 to rent, a gap of about $820 a month, on $139,111 of cash to close. That down payment is the second-largest in our set, and it is the single biggest reason this page is not faster: it is a lot of capital for the renter to keep invested.
The carry side. Property tax at $4,566 and insurance at $1,545 come to about $509 a month together. That is the second-lightest carry of any metro here — Phoenix is lighter, and nothing else is close. Compare it to Chicago, where those two lines alone run $743 a month on a house costing $245,000 less.
So the District is expensive to buy into and cheap to hold. Break-even lands in year 8 because the light carry gradually eats the monthly gap while rent inflation closes the rest.
The clearest way to see what the tax rate is worth here is not to change the rate but to move the house. Run this same price, rent and insurance at Fairfax County's $1.1225 per $100 and break-even goes from year 8 to year 12. Four years, for crossing the Potomac. That is the District's tax advantage stated in the only unit that matters on this site.
Where 0.73% comes from, and why it is not the Census number
The District's arithmetic is the simplest of any metro we cover — there is no assessment ratio, no equalisation factor, and one rate.
- The District assesses residential property at 100% of market value and revalues every parcel every year. There is no acquisition reset to reason about: a buyer's basis is the price paid.
- A house is Class 1B — residential with no more than two dwelling units — taxed at $0.85 per $100 of assessed value on the first $2.558 million. Only the excess above that is taxed at $1.00, which does not reach this page.
- The homestead deduction removes $91,950 of assessed value for an owner-occupier in tax year 2026.
That is ($625,503 − $91,950) × 0.85% = $4,535 a year, or 0.7251%, which we publish as 0.73%.
There is a useful check on that: the District publishes the homestead deduction's own worth as $781.58 a year, and $91,950 × 0.85% is exactly $781.58. Both the deduction and the rate confirm each other without reference to our arithmetic.
The Census ratio says 0.92%, which on this house would be $5,755 — about $1,220 a year more. It is wrong here for two reasons, and the bigger one is not the one you would expect.
Geography, first and largest. The ACS figure is struck over the Washington-Arlington-Alexandria CBSA, which spans four jurisdictions in four states. The District is its cheap part:
| Jurisdiction | Rate per $100 |
|---|---|
| District of Columbia | $0.85 |
| Arlington County, VA | $1.033 |
| Fairfax County, VA | $1.1225 |
| Alexandria, VA | $1.135 |
Montgomery and Prince George's in Maryland also sit above the District. A metro-wide average of those rates does not describe a District address, and this page prices a District address. Same failure mode as our Chicago page, in the same direction.
An incumbent cap, second and smaller. D.C. Code § 47-864 holds a homesteaded property's taxable assessment to 110% of the prior year's, so a long-tenured owner in a fast-appreciating neighbourhood can be taxed on a base well below what the house is worth. That credit does not survive a sale: it terminates at the end of the half tax year in which the interest transfers, and a buyer starts uncapped at full market value.
This is the same mechanism as California's Proposition 13 and Florida's Save Our Homes, and we treat it the same way — as a reason the survey's median owner is not the person reading this page. It is much milder here, though. A 10%-a-year cap in a market appreciating at a few percent binds rarely; Proposition 13's 2% binds every year and has since 1978. In Los Angeles that mechanism is worth 0.50 points of effective rate. Here it is a minor part of a gap that is mostly about which side of the river you are on.
A note on precision. The derivation lands at 0.7251%. We publish 0.73% and the calculator charges it, which is about $31 a year more than the arithmetic. We round every derived rate and every Census contrast to two decimals so the two can be read side by side at the same precision.
The catch our model does not include
The District charges the buyer a recordation tax. The rate is 1.1% of price below $400,000 and 1.45% on the entire amount above it. This house is well above the threshold, so a buyer pays 1.45% — about $9,070 in day-one cash that our standard model, which assumes no transfer tax, does not charge you.
There is a matching transfer tax at the same rates, but it falls on the seller, so it is not in the number above.
We ran it both ways rather than waving at it. With the recordation tax folded in, break-even moves from year 8 to year 9. One year.
Two things that could make your bill smaller. Qualified first-time buyers pay a reduced 0.725% recordation rate — half — subject to income and price limits, which would cut about $4,500 off the figure above. And unlike Pittsburgh's, where the 50/50 split is only customary, the District's allocation is the statutory default rather than a negotiating position.
The assumption that decides it
At our default 7% assumed return on the renter's invested capital, owning overtakes renting in year 8. At a more conservative 5%, owning breaks even in year 5.
Run Washington DC at a 5% return →
Three years is a wide-ish sensitivity, and the reason is the $139,111 of cash to close — the second-largest in our set. When the renter is sitting on that much capital, what you assume it earns is doing real work in the answer. This is the same shape as Seattle and Los Angeles, and the opposite of Pittsburgh, where the return assumption does not move the year at all.
If you want one input to argue with on this page, argue with that one rather than with the tax rate. The tax derivation is about as close to certain as anything on this site; the return on $139,111 over eight years is a genuine unknown.
What we are not modelling
This page prices a District address, and the metro is much bigger than that. The CBSA has 13 central counties and independent cities across the District, Virginia, Maryland and West Virginia. A buyer in Arlington, Bethesda or Fairfax faces a materially heavier tax line — the table above is the whole point — on a price this page takes from the metro-wide index. We picked one jurisdiction and named it rather than averaging across thirteen and naming none.
The insurance figure needs no geography factor here, and that is unusual. Most of our pages take a state written-premium average and move it onto the metro with a quoted CBSA-to-state ratio. The NAIC reports the District as its own jurisdiction, and this page prices a District address, so the regulator's geography already is this page's geography and $1,545 is published as it stands. Worth noting which way a factor would have pushed: quoted at a fixed $300,000 of coverage, District ZIP codes average $1,355 against $1,716 across the full CBSA. On insurance, as on tax, the District is the cheap part of its own metro.
The insurance level is a 2023 data year, the most recent written data the NAIC publishes, so it trails the 2026 price and rent above. Where the same thing can be measured — Texas — written premiums rose 25% between 2023 and 2025. Read $1,545 as a floor.
Condominium and co-op stock is not this page. We price a single-family house on both sides, Zillow's single-family value index against its single-family rent index, because the engine compares renting and owning the same home. A large share of District transactions are condominiums, which carry a monthly fee this comparison has no field for.
One national appreciation rate, 3.5%, as on every metro page here. We do not forecast metro-level price growth, because doing so would silently drive the result while looking like a fact.
Check it yourself
Open this Washington DC scenario in the calculator →
Related reading: closing costs by state, which covers recordation and transfer taxes like the District's, and the rent-to-price ratio.