Photo by Meritt Thomas on Unsplash
The final information is subject to the latest release from the following official websites:
This high-level checklist is for informational purposes to help you understand the tasks required to start your business. Ready to get started? Create a personalized checklist to walk you through the process and track your application process.
1. HOMESTEAD TAX DEDUCTION ELIGIBILITY
- COST: N/A
- AVERAGE PROCESSING TIME: N/A
Homestead Deduction and Senior Citizen or Disabled Property Owner Tax Relief:
This benefit reduces your real property’s assessed value by $78,700 (savings of $668.95) prior to computing the yearly tax liability.
The Homestead benefit is limited to residential property. To qualify:
- An application must be on file with the Office of Tax and Revenue;
- The property must be occupied by the owner/applicant and contain no more than five dwelling units (including the unit occupied by the owner); and
- The property must be the principal residence (domicile) of the owner/applicant.
If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead benefit for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the benefit reflected on the second-half tax bill (and full deductions for all tax years in the future).
2. LIABILITY INSURANCE
- COST: N/A
- AVERAGE PROCESSING TIME: N/A
With a short-term or vacation rental housing business, you must either use your homeowner’s insurance with a minimum of $250,000 in coverage or rent your property through a platform like AirBnB.
3. CERTIFICATE OF CLEAN HANDS
- COST: $0
- AVERAGE PROCESSING TIME: Varies
The District of Columbia “Clean Hands” mandate (DC Code § 47-2862) stipulates that individuals and businesses are to be denied city goods or services (e.g. licenses, permits, grants, contracts) if there is a debt owed to the District of Columbia of more than $100 for fees, fines, taxes, or penalties; and/or failure to file required District tax returns.
The Office of the Chief Financial Officer, Office of Tax and Revenue (OTR) facilitates administration and compliance of the Certificate of Clean Hands (CCH) mandate by providing individuals and businesses online self-service capability to generate or, in certain circumstances, request a “Clean Hands” certificate.
How do I request a Certificate of Clean Hands (CCH)?
Certificate of Clean Hands can be requested via OTR’s online portal, MyTax.DC.gov.
If you are a District of Columbia individual or business taxpayer, you must log-in to your MyTax.DC.gov account to generate the request.
If you do NOT have a MyTax account and are required to pay District of Columbia taxes (business or individual), you must first create a MyTax.DC.gov account. Once the account has been created, you can utilize the self-service feature to execute the request.
If you are not required to pay District of Columbia taxes and require a Certificate of Clean Hands, a manual request can be requested here.
What is evaluated when I request a Certificate of Clean Hands via the MyTax.DC.gov online portal?
The Clean Hands process assesses a taxpayer’s accounts with the Office of Tax and Revenue (OTR) and the Department of Employment Services for liabilities and unfiled returns.
Does a MyTax issued Certificate of Clean Hands have an expiration date?
A Certificate of Clean Hands represents your compliance status at the point-in-time the certificate is issued. Accounts balances can (and do) change through the passage of time and events. For this reason, functionality has been built into the system that allows agencies to confirm the authenticity of a presented certificate as well as to receive an up-to-date compliance status; however, for non-resident applicants, the Certificate of Clean Hands will expire 90 days from the date of issuance. Once the Certificate of Clean hands has expired, applicants must re-apply on MyTax.DC.gov.
4. SHORT-TERM OR VACATION RENTAL LICENSE
- COST: $104.50 for a two-year license
- AVERAGE PROCESSING TIME: 1-5 business days
Whether you are simply seeking to share your space with others or want to earn extra income by renting out your home, or a part of it, having a Short-Term or Vacation Rental License may help you achieve your goals.
In order to operate a short-term or vacation rental in the District, the property must be owned by an individual, and serve as a homeowner’s primary residence – with the owner being eligible to receive the Homestead Tax Deduction. The owner, or host, must attest to the habitability of the property.
Requirements to apply:
- Proof of liability insurance with a minimum of $250,000 in coverage must be provided – this may be obtained through a rental platform or from an insurance company.
- A Certificate of Clean Hands issued within the last 30 days in the property owners name must be obtained from the Office of Tax and Revenue.
- If the rental is a co-op, condo, or if the property is in a community where there is a homeowners’ association, the owner must attest that the bylaws, house rules, or other governing documents of the homeowner/condo/ cooperative governing board or association allow short-term and/or vacation rentals, do not prohibit owners from operating short-term rentals and/or vacation rentals, or that they have received written permission from the association to operate a short-term and/or vacation rental at the address.
Things to Know and Steps to Apply for Your Short-Term Rental License
- All DLCP systems, including the District of Columbia Short-Term Rental Licensure platform, require customers to have a single sign-on, Access DC, account to use our systems. If you already have an Access DC account, you can skip this step. If you do not, it is easy to sign up.
- Visit the District of Columbia Short-Term Rental Licensing Platform to begin the licensing application process. You will be asked to provide basic contact information to register for the licensing platform.
- After registering, you will be asked to link your license platform account with the address where you will be conducting short-term rentals.
- Once your address has been verified, you will be asked to complete the full license application and pay the licensing fees. To assist you in being prepared to submit you license application, please have the following information available and ready to upload to the platform:
- Certificate of Clean Hands issued within the last 30 days in the property owners name (request from the DC Office of Tax and Revenue)
- Proof of liability insurance (a minimum of $250,000 in coverage)
- Completed Short-Term/Vacation Rental Attestation Form if your property is in an association (HOA, condo, CoOp, etc.)
- Credit/debit card to pay license fees