The Effect of the District of Columbia’s Assessment Limitation on Property Tax Equity

Abstract

In 2002, the District of Columbia implemented the Residential Property Tax Credit program. This program, while technically a credit, is in effect a property tax assessment limitation that applies to owner-occupied housing. Initially, the maximum growth in net assessed value was set at 25 percent, but is now 10 percent. Property tax assessment limitations are expected to create significant variations in net taxable assessments across property, both vertically and horizontally, and we explore the extent of the variations created by the assessment limitation in the District of Columbia. We find substantial variations, both vertically and horizontally. We also explore explanation for the magnitude of the variations.