City, County and State-Specific Procedures for Obtaining Real Estate Tax Exemption
Please select the location in which the property in question is located.
District of Columbia
Los Angeles
Maryland
New York
Virginia
Other
District of Columbia
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM asking it to authorize the District of Columbia’s Office of Tax and Revenue (OTR) to grant an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. At the time of this request, foreign missions should provide OFM with a completed original copy of OTR’s “Foreign Government Information Request Form.” The foreign mission may send the original copy of this form to Room 2236 at the Harry S Truman Building, 2201 C Street, NW, Washington, DC 20520.
3. If OFM determines that the associated property is entitled to such treatment, it will send a letter, along with a completed original copy of the “Foreign Government Information Request Form,” informing OTR that it is authorized to grant the requested property tax exemption.
4. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing.
5. OTR will send a confirmation letter to OFM when the property tax exemption is processed, and OFM will then forward a copy of the confirmation letter to the requesting mission’s office.
Recordation and Transfer Taxes
1. Foreign missions must submit requests to OFM asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
California
Los Angeles
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM’s Los Angeles Regional Office asking it to authorize the Los Angeles County Assessor to grant an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. If OFM determines that the associated property is entitled to such treatment, it will send a letter, informing the Los Angeles County Assessor that it is authorized to grant the requested property tax exemption.
3. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing.
4. Los Angeles County Assessor will send a confirmation letter to OFM/LA when the property tax exemption is processed, and OFM will send a copy of the confirmation letter to the requesting mission’s office.
Recordation and Transfer Taxes
1. Foreign missions must submit a request to OFM/LA asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
Maryland
Montgomery County, MD
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM asking it to authorize the Maryland State Department of Assessments and Taxation (SDAT) to grant an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. If OFM determines that the associated property is entitled to such treatment, it will send a letter, informing SDAT that it is authorized to grant the requested property tax exemption.
3. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing
4. SDAT will send a confirmation letter to OFM when the property tax exemption is processed, and OFM will then forward a copy of the confirmation letter to the requesting mission’s office.
Recordation and Transfer Taxes
Many missions purchase residential properties in Montgomery County, Maryland. The procedures for obtaining exemptions from recordation and transfer taxes in that jurisdiction are more complicated than in Virginia and the District of Columbia. There are separate county and state taxes associated with the purchase or sale of real property, and a foreign mission must obtain separate letters from OFM requesting exemption from each taxing authority before settlement.
Until 2005, a foreign government purchaser was granted, in most cases, one hundred percent (100%) exemption from the county transfer tax at the time of purchase and zero percent (0%) at the time of sale. This was in contrast to the Maryland State transfer/recordation tax that permitted a foreign government fifty percent (50%) exemption at the time of purchase and fifty percent (50%) at the time of sale.
In 2005, the Montgomery County taxing authority decided to follow the practice of the State authority and grant fifty percent (50%) at the time of purchase and fifty percent (50%) at the time of sale. Therefore, regardless of the contract terms between the parties, foreign missions will be granted exemption from fifty percent (50%) of the State and fifty percent (50%) of the country transfer tax at the time of purchase and fifty percent (50%) at the time of sale. Missions should prepare their purchase and sales contracts accordingly.
Missions should note that Montgomery County’s change in policy applies prospectively. Therefore, property purchased prior to 2005, that was granted one hundred (100%) percent transfer tax exemption at the time of purchase, will not enjoy exemption at the time of sale. Missions are encouraged to prepare their sales contracts accordingly. If additional information is required, missions may contact OFM.
To obtain Recordation and Transfer Tax Exemption in Maryland:
1. Foreign missions must submit a request to OFM asking it for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send original letters to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
Foreign missions are also advised that Maryland law requires that non-resident sellers of real property have seven percent (7%) of their sales proceeds held back in escrow unless the seller obtains an exemption certificate at least 21 days prior to settlement.
In order to obtain exemption from the withholding requirement missions must complete a Maryland State form MW506AE, which may be found at www.marylandtaxes.com, and attach documentation confirming the tax exempt status of the property. If there are any questions, missions are asked to contact OFM.
New York
New York City
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM’s New York Regional Office asking it to authorize New York City’s Department of Finance (NYCDOF) to grant, for a property it owns and has been previously authorized by OFM for diplomatic or consular use, an exemption from property taxation.
2. At the time of such request, foreign missions should provide OFM with a completed original copy of NYCDOF’s “Exemption From Real Estate Taxation for Property Owned by Foreign Governments.” www.nyc.gov/html/dof/html/pdf/03pdf/foreign_exemption.pdf
3. If OFM determines that the associated property is entitled to such treatment, then it will send a letter, along with the completed original copy of the “Exemption From Real Estate Taxation for Property Owned by Foreign Governments,” that informs NYCDOF that it is authorized to grant the requested property tax exemption.
4. Foreign missions are not required to permit, as a precondition of being granted property tax exemption, an inspection by a NYCDOF representative. Any issues concerning this matter should be immediately referred to OFM.
Recordation and Transfer Taxes
1. Foreign missions must submit a request to OFM asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission confirming its eligibility for this privilege, which the mission must present at the settlement of the property to be eligible for the exemption.
Virginia
Arlington County
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM asking it to authorize the Department of Real Estate Assessments for Arlington County to grant, for a property that has been previously authorized by OFM for diplomatic or consular use, an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. If OFM determines that the associated property is entitled to such treatment, it will send a letter, informing the Department of Real Estate Assessments for Arlington County that it is authorized to grant the requested property tax exemption.
3. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing.
4. The Department of Real Estate Assessments for Arlington County will send a confirmation letter of property tax exemption to the foreign mission.
Recordation and Transfer Taxes
1. Foreign missions must submit a request to OFM asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
Fairfax County
Property Tax
1. Before the settlement of a purchase of a property, that has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM asking it to authorize the Department of Tax Administration of Fairfax County to grant an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. If OFM determines that the associated property is entitled to such treatment, it will send a letter, informing the Department of Tax Administration of Fairfax County that it is authorized to grant the requested property tax exemption.
3. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing.
4. The Department of Tax Administration of Fairfax County will send a confirmation letter of property tax exemption to the foreign mission.
Recordation and Transfer Taxes
1. Foreign missions must submit a request to OFM asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
Other
Property Tax
1. Before the settlement of a purchase of a property, which has been previously authorized by OFM for diplomatic or consular use, foreign missions must submit a request to OFM asking it to authorize the appropriate tax authority to grant an exemption from property tax. This request must inform OFM of the date upon which the property’s deed will be signed.
2. If OFM determines that the associated property is entitled to such treatment, it will send a letter, informing the tax authority that it is authorized to grant the requested property tax exemption.
3. The effective date for this exemption will be the date the property’s deed is signed/transferred. This date generally coincides with the date of the property’s settlement/closing.
Recordation and Transfer Taxes
1. Foreign missions must submit a request to OFM asking for its permission to purchase or sell a property. Please click here to obtain detailed information concerning the process foreign missions must follow with respect to acquiring or selling real property in the United States.
2. If OFM determines that the associated property is entitled to such treatment, it will send an original letter to the foreign mission, which the foreign mission must present at the settlement of the property to be eligible for the exemption.
