Dear PoPville – Why do DC Government Employees Get a Homebuyer Credit?

Photo by PoPville flickr user StreetsofWashington

Dear PoPville,

I was doing my DC taxes today while mourning the loss of the first time DC homebuyer tax credit. I discovered a first time homebuyer credit, but alas it was only for DC government employees. Why is there a tax credit only for DC government employees? It seems rather corrupt to me, which only justifies my feelings about DC government.

41 Comment

  • First time home buyer credit is INCOME sensitive and has nothing to do with whom you work.

  • It is likely an incentive for DC Government employees, such as police, firefighters, and teachers, to live in the District rather than in neighboring suburbs. The reasoning, I suspect, is to strengthen ties between civil servants and the communities that they serve.

  • anon, you’re a bit out of date. the federal first time homebuyer’s credit expired at the end of 2011. no one who’s bought a house since then can get it. same with the special credit for first-time homebuyers in DC.

    DC does offer a credit for its govt. employees who live in the District. I think this is because they think it’s better for govt. employees to live nearby (able to report to work in bad weather or emergencies, paying income taxes to DC, more invested in their jobs, etc.).

    According to it’s only for homes under $417k, so most of the higher-paid employees probably wouldn’t use it. But it comes with matching down payment funds up to $1,500, a deferred loan of up to $10,000, and an income tax credit of $2,000 a year for five years. So figure that’s $11,500 in giveaways and $500 in interest on the deferred loan for a total of $12,000. It’s probably a good deal to offer this because the employee (plus spouse if applicable) will pay way more than $12k in DC income, sales, and property taxes over 5 years. Why should MD or VA get that money?

  • yeah, doesn’t make a lot of sense to me either. If the goal is to encourage DC gov. empl. to live in DC then maybe DC residency should be a requirement or at least a big factor in hiring decisions.

  • There is a program that is geared towards firefighters, teachers, etc. in most communities. Part of it is to ensure that first responders are closer to where they work in case of an emergency. Also, the idea is that you want folks working in your community and serving that community to have a stake in it. These are not just in DC but are in most states. Do a search for police officer or teacher home buyer credit, you’ll find them in Texas, New York, etc.

    You can not like the idea or support the idea behind the tax credit but it certainly isn’t some DC corruption scandal.

  • God forbid somebody gets something you dont. Life isnt fair. Or maybe it is fair, just go be a DC teacher, firefighter, cop. Oh, you don’t want to do that…

    • I don’t think anyone has objected to that (at least not yet).

      I think people are more perturbed about ANY employee of the D.C. government being eligible for the credit — i.e., that it’s not limited to those professions.

  • If you are doing your own DC taxes this year, you will see a question regarding whether you are a first time DC homebuyer because if so you will receive a credit if you are a DC government employee. That is the only way to receive the credit. Clearly many here either do not do their own taxes, or have not done them yet, this year.

  • Yea, trying to help police officers, firefighters, teachers, and other public servants live in the communities they work in, despite underpay and a high cost of living in DC. That’s real corrupt.

    Honest, hardworking DC government employee here. For every lazy, uncaring, and selfish government employee in the news for corruption and misconduct, there are many more of us who work hard and try to make this city better everyday. They’re just not the ones that make headlines. Just thought you should know.

    • Well said Tim.

      And thanks for all the (unappreciated) hard work.

    • +1. I’m so tired of people assuming the whole lot of employees are bad. It’s an insult to my friends and family who work hard for this city, yet get called lazy and/or corrupt by narrow-minded people.

    • Thank you for your service! There are a lot of residents that appreciate all that DC government workers do, even if it doesn’t feel like it at times.

    • I’m one too.

    • well said tim!

      • Thanks everybody…I also work for DC government. We have been under a hiring freeze, a pay freeze, a furlough, and a training and travel ban since I started three years ago. People who think we are living off the fat of the land really ought to try it. It is not glamorous, it is hard work, and most of us do care about doing the best we can for our city.

  • For the record, that same credit is extended to Montgomery County employees as well…as previously stated it helps in many ways and I for one am very grateful that I have a number of DC residents, including quite a few police officers living in my neighborhood. Everything is not a scam or a scandal…

  • For almost all other states, you pay your income taxes in the state you work in, not the state you live in.

    For DC, that’s not true– if you live in VA or MD but work in DC, you pay your state income tax in VA or MD. Basically, DC gets screwed on this deal to the benefit of its neighbors.

    That means that it effectively costs the DC government more to pay a worker who lives in VA or MD than it does to pay that same worker if they lived in DC, because the DC government doesn’t get a cut of that salary in income taxes.

    It may make straight-up financial sense for the District to incentivize its employees to live in the District proper.

    • I don’t think this is right – you usually pay your taxes where you live, regardless of where you work. At least for states that have reciprocity with their neighbors.

      • Some states have reciprocity agreements, but not all–for example, New York-New Jersey-Connecticut don’t have reciprocity. DC’s reciprocity is unusually broad in that if you’re a resident of ANY state who works in DC, you can pay income tax to your state of residence rather than to DC. Many of the states in our region have reciprocity, although Delaware isn’t part of either Maryland’s or Pennsylvania’s reciprocity agreements. If you’re not under a reciprocity agreement, your employer is supposed to withhold tax in State X on the income you earned in State X (not all employers are vigilant about this, although states have started to be); you file a nonresident return for State X and either owe or get a refund accordingly. Then you file a special form with your home-state resident tax return requesting a tax credit for the amount you paid to State X (so you don’t get double-taxed in both your home state and the non-reciprocal state where you worked. I only know this because my sister is a traveling consultant, and I do her taxes.)

    • I’m not sure I follow this argument. I don’t know about almost all other states, but if you live and work in any combination of MD, VA, and DC, you only pay income taxes to the one where you live. So really DC wants to attract residents regardless of who they work for, not just those who work for the DC govt.

      Therefore limiting the house credit to gov’t employees (as opposed to all new residents, say) seems to imply that there is some other non-economic benefit to having those employees living in the District, right?

      • Yes, the non-economic benefits (as a couple of other commenters have mentioned) include things like closer proximity for first responders, as well as (so the theory goes) an increased connection to and respect for the communities they’re serving, particularly in the case of professions like police and fire. It’s not necessarily ideal in terms of community relations, for example, to have most of the police force commuting in from the far-exurbs. On the other hand, the exurbs can be cheaper than the city AND it would be politically unpopular (not to mention a challenge to recruiting) to MANDATE that all city hires live within city limits. Hence the compromise in the form of city-living incentives like this.

  • I won’t rehash what the posters above say about encouraging city employees to live in the city.

    It is obvious you haven’t lived in DC for long but this used to be a big issue. Barry or all his ills really wanted DC workers to live in DC. The problem is that many of the workers didn’t live in DC because they wanted the types of houses that weren’t as thick on the ground in DC and much of the better housing stock wasn’t affordable.

    I understand you are pre disposed to believe that the whole of DC government is corrupt (which make me wonder why you choose to live in DC) but in point of fact this doesn’t encourage corruption, any more than the loopholes in the IRS code does. I bet you take advantage of every one of those?

  • It’s about as “corrupt” as the Homestead deduction. Do you take advantage of that?

  • Good job, gumshoe. you found corruption!

    you also twist facts to reinforce your strongly held beliefs. you should write a chain email about it.

  • I have lived in the District for the past 11 years and have worked for the District for the past 7. I am proud to work for the residents of DC. We are always looking for qualified workers. Go to to find current openings. We not only get a first time home buyers credit, we also get discounted Nationals and Wizards tickets, and a discount at washington sports clubs.

  • This is almost as absurd as the post I read a couple weeks ago on here: why does DC have affordable housing for people like those who work for non-profits and “choose to make less money to do something they love?”


  • Those who want it (those priviliged to get it by having a GVT job) will always defend it and fight for it, those who do not want it (those that pay for it but can’t get it because they have to work in the real world) will generally argue against it as unfair (duh as it is)

    Problem is, those who want it are those who make it happen by providing it to their own. This is just like congress who have better benefits and laws than those they “serve”.

    • Actually, it’s nothing like Congress giving itself better benefits than the average worker. If you look at health care, for example, there is no policy justification for members of Congress to have access to better health insurance than the average citizen. But as stated by others above there are numerous policy justifications for incentivizing employees of the DC government to live in the Distict.

    • False analogy. The correct analogy would be city council=congress, not city employees=congress. Don’t blame dc government workers for a benefit they didn’t give themselves.

      Plus, as Marcus and others have noted, there is plenty of justification for such a policy.

  • Moral to this story… Everybody wants free shit.

  • So does anyone have any proof this actually exists? None of the links below actually mention the credit for employees…

    • The links in the posts by Matt and sbc link to a page that mentions tax credits for DC govt employees.

      • I did see those, but they are both programs that one has to apply/qualify for via a CBO (i.e., it’s not automatic). All the COBs listed offer counseling services for low-income families, but none of the qualifications are listed and I can’t find information on any of these sites describing how one can apply. All of Is this a credit that’s based on certain factors like income or home purchase price, or is it a blanket credit for all employees?

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