The taxable assessed value of commercial property in D.C. has fallen by nearly $12 billion in two years, reflecting the massive challenges facing the District’s office market and its economy overall.
For fiscal year 2023, which ended Sept. 30, the assessed value of all taxable commercial property in Washington came in at $101.18 billion, down from $102.7 billion in 2022 and $112.7 billion in 2021, according to the District’s 2023 Annual Comprehensive Financial Report, released Thursday. That two-year decline represents more than $200 million in foregone tax revenue — there are multiple tax rates depending on a property’s value, occupancy and condition.
As assessed values collapse, so do property sales — both in their frequency and their closing prices. Deed tax revenue declined by 40% year over year, per the ACFR, and D.C. CFO Glen Lee told the D.C. Council on Thursday he expects the District to collect between $250 million and $300 million less in commercial property taxes annually than it did in its fiscal 2021 peak due to dropping values.
