DC Budget Updates and New Tax Exemptions for Nonprofits and Workforce Housing
New DC Real Property Tax Exemptions for Nonprofits
The District of Columbia has enacted several pieces of legislation affecting real property tax exemptions for nonprofit organizations . D.C. Law 26-126, effective June 11, 2026, provides a real property tax exemption for the property located at 2405 First Street, NW, owned by the Mu Lambda Foundation, Inc. for its charitable and educational purposes . The exemption is effective from October 1, 2025, to September 30, 2055, provided the property continues to be used for those purposes and not commercially .
Additionally, the FY2026 Budget Support legislation made several changes to nonprofit property tax exemptions . It removed the requirement that a nonprofit workforce housing project must meet certain tenant income and rent requirements within 12 months of acquisition. Instead, these requirements must now be certified on an annual basis, providing more flexibility for organizations developing affordable housing . The legislation also clarifies that nonprofit property used for solar energy generation, energy storage, or electric vehicle charging does not lose its tax-exempt status .
DC Central Kitchen Tax Rebate and Community Land Trusts
The FY2026 budget also expanded the tax rebate for D.C. Central Kitchen (DCCK) , a nonprofit organization fighting hunger and poverty through job training . The expanded rebate removes the $208,000 annual cap and includes its new leased space at 2121 1st Street SW, allowing the organization to expand its community services and job training programs. A fiscal analysis estimated the rebate’s total value at approximately $2.3 million through 2052 .
Moreover, the budget legislation provides tax benefits to Community Land Trusts (CLTs) , which are nonprofit organizations that acquire and hold land to provide affordable housing in perpetuity . The legislation exempts CLT-owned property from real property tax, exempts property transfers to CLTs from real estate transfer and deed recordation taxes, and allows individuals with a land lease from a CLT to claim a homestead deduction . These provisions create a more favorable environment for nonprofits engaged in affordable housing development. These changes can significantly affect a nonprofit’s financial landscape, making it crucial to work with an advisor who understands the nuances of DC’s tax code. Nova Tax & Accounting Services offers expert tax solutions and consulting to help nonprofit organizations understand and maximize these opportunities. Contact us to schedule a consultation and ensure your organization takes full advantage of available tax benefits.