District of ColumbiaB26-0149Council Period 26 (2025-2026)HouseWALLET

Residential Building Permit Classification Emergency Amendment Act of 2025

Sponsored By: Phil Mendelson (Democratic)

Became Law

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 2 benefits, 1 costs, 2 mixed.

Retroactive taxes for late conversions

Beginning April 1, 2025, if a property changed to Class 1A but was not put to mostly residential use by the earlier of a new or amended certificate of occupancy, three years from the building permit date, or one year after an expired permit without renewal, the CFO reclassifies it and bills back taxes for each affected year or half‑year. Penalties and interest run from when the correct tax was due. You have 45 days from a denial notice to seek an administrative review and you can appeal a final decision. The CFO may give more time or waive penalty and interest to prevent undue hardship.

Class 1A homes can host short stays

Beginning April 1, 2025, a Class 1A home used for nontransient living, and not Class 1B, may host short‑term guests if it has an unexpired short‑term rental license endorsement under § 30‑201.04. The license must stay current.

Permits can qualify projects as residential

Beginning April 1, 2025, property or a portion with a building permit to construct a new improvement for predominantly nontransient residential use, or to substantially rehab for exclusively nontransient residential use, qualifies as Class 1A. This can move the residential tax class earlier in a project.

Tighter rule for Class 1A label

Beginning April 1, 2025, the law requires a property be designated solely as Class 1A under the affected clause. This tighter wording narrows when owners can claim that label.

How to reclassify and when taxes change

Beginning April 1, 2025, to get Class 1A you must apply and send all documents the CFO requires. The change takes effect in the half tax year you apply for. If your property becomes Class 1A between Oct 1 and Mar 31, the Class 1A rate applies for the whole tax year; if Apr 1 to Sep 30, it applies only to the second bill. You must still file on time for mixed‑use for the upcoming year when an annual assessment is made and a certificate of occupancy exists.

Sponsors & Cosponsors

Sponsor

Phil Mendelson
Democratic • House

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 12 • No: 0

House vote • 3/4/2025

Final Reading