DC Economic Interest Purchase Money-Recordation Tax

taxDC Expands Exemptions for Recordation Tax on D/T’s Association with Deeds of Economic Interest

While it has long been the practice and law that deeds of trust filed simultaneously with the acquisition of real estate are exempt from recordation tax, the exemption was limited to interests in real estate. Since a Deed of Economic Interest (“DOEI”) conveyed no interest in land, the accompanying Deed of Trust was not exempt.  The result was that the buyer paid full recordation and transfer taxes on the DOEI and pay an additional recordation tax on the deed of trust.

Effective May 9, 2014, the regulations were changed to loosen this narrow application of the exemption law.   9 DCMR 519 was amended to include 519.3a  which provides for an exemption if:

Deed of trust is on a purchase money note used to secure the economic interest (i.e. to purchase the stock or membership interest)

  1. Deed of trust is filed either
    1. simultaneously with the DOEI, or
    2. executed within 30 days of the DOEI and recorded within 30 days of the recordation of the DOEI

If you have paid a recordation tax on a deed of trust related to a DOEI, you might consider filing a Claim for Refund and forwarding it along with supporting documentation (including proof of who paid the recordation tax )  and sending the package to the attention of at Ciania Botchway at OTR.