I just got a shock receiving my property tax bill that I want to see if anyone else has experienced. I updated my Columbia Heights rowhouse kitchen and added a powder room last year and (stupidly, it turns out) applied for a building permit. The total cost was $40-50K. The permit triggered a supplemental assessment. The supplemental assessment increased the market value of my house by almost 50% (not counting land value), which I appealed and they adjusted it slightly.
Now I’m learning that just having the supplemental assessment not only increased my assessed value, it meant that I lost the 10% collar on my taxable assessment (i.e. rule that says assessment can only increase 10% a year) that is part of the homestead exemption (the other part is the deduction from value of around $70K). Since I bought a real dump of a house, that 10% a year limit meant my taxable assessment was only about 60% of the market assessment. Suddenly my property taxes have almost doubled.
The assessor who visited the house during the appeal explained to me that the supplemental assessment did not affect the taxable assessment, which would still only increase 10% from the prior year, but only the market assessment, but in fact it did exactly that. I cannot get hold of the assessor (hate that DC voicemail message that says all calls will be returned in 24 hours — it never happens). However, the assessor’s boss explained to me that what he did is normal.
The result is that there is no incentive to apply for a building permit, in my opinion, because it will trigger an interim assessment and cost you the your 10% limit on your tax increases. Better to risk getting caught and paying the penalty, it would seem.
Has anyone experienced this? Did you realize working on your house would produce this result in advance? Did you do anything about it?”