Securing the District’s Financial Future
With the District facing significant financial pressures, Councilmember Frumin is focused on tax policies that protect essential services while promoting long-term fiscal responsibility. He is committed to ensuring that working families, seniors, and everyday residents do not disproportionately bear the burden of funding our government. Through careful oversight, data-driven revenue strategies, and transparent budgeting, he is working to build a tax system that is fair, competitive, and capable of meeting our communities’ needs.
The Council will face difficult choices in the next fiscal year budget regarding spending, revenue, and economic growth. Councilmember Frumin will continue to host budget forums and solicit direct feedback to ensure tax and spending priorities align with our values.
Current Legislation: The Pied-à-Terre Tax
A pied-à-terre is a residential property kept by its owner for occasional use, rather than serving as a primary, full-time residence. Councilmember Frumin recently introduced legislation to establish a pied-à-terre tax that aims to:
- Targeted Tax Rate and Narrow Scope: Establishes a new Class 1C property tax category that applies to select non-owner-occupied residential properties that carry an assessed value of $2.558 million or greater and for which the owner does not claim the District’s homestead deduction. Class 1C properties will be taxed at $2.50 per $100 of assessed value. This rate equates to half the District’s vacant property tax rate, reflecting that these luxury homes sit empty for at least half the year. According to the Office of Revenue Analysis, the Class 1C designation will apply to roughly 600 properties out of 371,606 housing units across the District.
- Generate Critical Revenue: Creates a new, sustainable funding stream to help address the District’s budgetary pressures without raising taxes on primary homeowners. Over the District’s four-year financial plan, the measure is projected to raise more than $130 million to support core priorities, including homeless services, education, health care, and public safety.
- Protect the Housing Market: Discourages the underutilization of residential properties, helping to preserve housing stock for residents who live and work in the District full-time.
Residents can learn more about the proposal in the official press release here.
Residents can view the bill and track its status on the DC Council website here.
Update: The pied-à-terre tax will be discussed at a Committee of the Whole roundtable on October 16, along with other tax concepts, including business activity tax, sales tax, real property tax, individual income tax, and more. Residents are encouraged to tune in and provide testimony. Learn more about the hearing on the DC Council website here.
Resources
Understanding District tax policy can be complex. Below are select reports, memos, and data sources to help residents stay informed on the financial health of the District:
Share Your Thoughts Your feedback is critical to our work on the Council. If you have questions about the District’s tax code, suggestions for revenue generation, or concerns about the upcoming budget process, please reach out to our team at fruminoffice@dccouncil.gov.