Chart of the week: Proposed “mansion tax” would generate tax revenue from small group of D.C. property owners

May 31, 2024
  • Meredith Gavin

This week, the DC Council voted on the revised Fiscal Year 2025 Local Budget,[1] reversing some budget and program cuts proposed in Mayor Bowser’s budget proposal.[2] To make up for fiscal gaps, the Council is raising some taxes, including a real property tax increase for residential properties assessed at above $2.5 million. The so-called “mansion tax” would separate class 1 properties into classes 1a and 1b. Properties assessed above $2.5 million would be deemed class 1b and would be subject to a $1.00 tax per every $100 of assessed value above $2.5 million, compared to the current $0.85. The tax increase would generate an additional $5.7 million in revenue for fiscal year 2025 and $23.7 over the course of the financial plan.[3]

Due to wealth distribution within the District, the tax revenue would be driven by a small subset of neighborhoods, primarily in the Northwest. Of the District’s 74 neighborhoods recognized in the appraisal guidelines, less than half, or 31 contain at least one property valued above $2.5 million. Georgetown is home to the most properties assessed above $2.5 million, at 515 properties, or 20 percent of its total properties.  Of all neighborhoods in the District, Massachusetts Avenue Heights has the highest percentage of properties assessed above $2.5 million, with 50.7 percent of all properties in the neighborhood falling into that category. Over 50 percent of the estimated increase in tax revenue will come from three neighborhoods: Georgetown, Kalorama, and Massachusetts Avenue Heights.

Property taxes on high value residential properties are a tool to increase city tax revenue while only impacting a small portion of the population. Approximately 2,800 properties in the District would fall under the proposed tax, prior to exemptions and adjustments, or about 2 percent of all properties characterized as single-family homes including condominiums. The tax has been discussed in D.C. periodically in recent history; in 2019, DC Council debated a bill that would levy a $1.25 tax for every $100 above $1.5 million and below $5 million on residential properties.[4] More recently, the Tax Revision Commission explored options for a high value home tax with a rate of $1.20 for every $100 of assessed value above $2 million.[5]

While a utopic tax policy expands the tax base and lowers the rate, the proposed property tax hits a sweet spot for political viability. It impacts a small share of homeowners in the District and raises notable revenue to fill budget gaps.  

[1] Bill 25-784, the Fiscal Year 2025 Budget Support Act of 2024. Bill 25-784, the “Fiscal Year 2025 Budget Support Act of 2024”

[2] FY2025 Proposed Budget and Financial Plan.

[3] Report on Bill 25-784, the “Fiscal Year 2025 Budget Support Act of 2024.”

[4] B23-0299 – Residential Real Property Taxes Equitable Alignment Act of 2019.

[5] D.C. Tax Revision Commission Chairman’s Mark.


Meredith Gavin

Program Manager
D.C. Policy Center

Meredith is the Program Manager at the D.C. Policy Center. In her role, she manages publications, communications, and outreach.  

Prior to joining D.C. Policy Center, Meredith interned with (re)Chicago and served an AmeriCorps Vista year with the EnVision Center at the Philadelphia Housing Authority. In both roles, she worked to identify ways to improve access to and efficiency of public services.  

Originally from Reading, Pennsylvania, Meredith holds a Bachelor of Arts from Temple University and a Master of Public Policy from the University of Chicago Harris School of Public Policy.  

You can reach her at