Moving to Washington DC: taxes, neighborhoods and the DC vs Virginia choice

At a glance

Is moving to Washington, DC a good idea if you earn a lot?

It depends on which number in your life is bigger: your income or your house. At $1 million of taxable income, a single filer pays $91,525 in DC income tax and about $90,385 in Maryland state tax plus Montgomery County's 3.2% local rate. That's a gap of about $1,100. Virginia is the outlier at about $57,243, roughly $34,000 less than either.

The house runs the other way. On a $3 million house, DC's tax year 2026 property tax is $26,163 a year before the homestead deduction, while Fairfax County's rate gives $33,600 and Arlington County's gives $31,590. So the DC premium grows with your income and shrinks with your house.

This describes how the taxes work; it isn't tax advice. Confirm your own numbers with a CPA who files in DC, Maryland and Virginia.

Should I live in DC, Maryland or Virginia?

For most high earners the choice comes down to two lines: income tax and property tax. Federal tax is the same wherever you live, so it drops out.

Income tax at $500,000 and $1 million

DC taxes income above $1 million at 10.75%, the top bracket on the Office of Tax and Revenue's schedule. Maryland's 2026 withholding guide adds two new top brackets for single filers, 6.25% from $500,001 and 6.5% above $1 million, and Montgomery County adds its 3.2% local rate on top. Virginia's schedule tops out at 5.75% on income over $17,000.

The surprise is how close DC and Montgomery County land. At $500,000 of taxable income, DC is slightly lower. At $1 million, DC is about $1,100 higher. Above that, each extra dollar costs 10.75 cents in DC, about 9.7 cents in Montgomery County and 5.75 cents in Virginia, so the Virginia gap widens fast. The DC brackets are broken down on our guide to DC income tax rates.

Property tax on a $3 million house

DC's tax year 2026 rate for houses and individually owned condo units (Class 1B) is $0.85 per $100 on the first $2.558 million of assessed value and $1.00 per $100 on the rest. Older articles still quote a flat $0.85, which understates the bill on a house above that line. Fairfax County cut its rate to $1.12 per $100 in the budget adopted May 5, 2026; Arlington County raised its rate to $1.053.

So on a $3 million assessment, DC's bill is $21,743 on the first tier plus $4,420 on the second, $26,163 in all, or $25,243.50 once the 2026 homestead deduction of $91,950 comes off the assessment. Fairfax's is $33,600 and Arlington's is $31,590. Montgomery County's 2026 rate wasn't confirmed on an official page, so Maryland's total is left incomplete below. The homestead deduction, the assessment cap and the appeal process are on the DC property tax page.

The two lines together

With a $3 million house, DC costs about $6,800 more a year than Fairfax at $500,000 of income and about $26,800 more at $1 million. With DC's homestead deduction applied, the crossover is roughly $330,700 of taxable income: below it the same house costs less to hold in DC, above it less in Fairfax.

Method: taxable income for a single filer, run through each published 2026 schedule (Maryland state brackets plus the 3.2% Montgomery County rate in the Comptroller's withholding guide; Virginia's $720 plus 5.75% over $17,000). Property tax is the assessment times the current rate, before DC's homestead deduction or any credit. Joint filers use different Maryland brackets, Virginia's schedule should be checked against the current Form 760 instructions, and Maryland has a capital-gains surcharge for high incomes that isn't modeled here.

Redo it with your own numbers

Take your expected taxable income and the price of the house you'd buy. For DC, the tax on income above $1 million is $91,525 plus 10.75% of the excess; for Virginia it's $720 plus 5.75% of everything above $17,000. For property tax, multiply the price by 0.0085 up to $2.558 million and by 0.01 above it in DC, by 0.0112 in Fairfax and by 0.01053 in Arlington. If your income gap pays for a Virginia commute, model Virginia first; if your house is the big number and your income is moderate, DC's property tax is the lighter one.

House or condo: where do you start looking?

In Zillow's August 2026 data, the DC neighborhoods made of houses rose while the condo neighborhoods fell. That split is the most useful fact for anyone deciding what to buy.

Houses in Northwest DC

Zillow's typical home value in its Georgetown area was $1,515,129 in August 2026, up 3.57% in a year and an all-time high. Burleith ($1,582,587), Foxhall ($1,324,355), Kalorama ($1,380,095) and Spring Valley ($1,996,401) all gained between 3.4% and 4%. Over the same year DC's typical value fell 1.05% to $570,082. The house neighborhoods have been the steadier store of value. The catch is entry price: Georgetown's typical value is about 2.7 times DC's. Our DC luxury homes by neighborhood guide compares them street type by street type.

Condos near the center

Next door to Georgetown, Zillow's West End typical value fell 2.01% to $636,434 and Foggy Bottom's fell 4.08% to $404,570. A condo there costs far less to enter and spares you an old house's upkeep. The catch is a falling market and condo fees you'll need from the association, along with any planned special assessment.

Do you need a car in DC?

It depends on the neighborhood more than the city. Georgetown, for example, has no Metrorail station; the nearest are Foggy Bottom-GWU and Rosslyn. The DC Circulator bus, which ran a Georgetown route, stopped after December 31, 2024, and WMATA relaunched its whole bus network with new route names on June 29, 2025. Check the WMATA trip planner for the route from any address you're considering, because routes have changed twice since 2024.

Parking if you keep a car

A DC Residential Parking Permit costs $55 a year for the first vehicle, $80 for the second and $115 for the third. It lets a DC-registered car park past the 2-hour limit on permit blocks in its home zone. A permit isn't a space, so on a street of row houses, off-street parking changes daily life more than most finishes do. The day-to-day trade-offs are covered in what living in Georgetown is like.

How do schools work after a move to DC?

DC public school assignment runs on your exact address. Every K-12 student has a guaranteed right to enroll at the in-boundary school, and each address maps to an elementary, middle and high school. Boundaries can change, so run the DCPS in-boundary lookup on the specific address before you make an offer, not on the neighborhood.

Private schools and the neighborhood you pick

If you're looking at independent schools, location and house search overlap. Nine of the 13 schools on our list have a campus in ZIP codes 20007, 20008 or 20016, three of them in Georgetown's own 20007. Grades, campuses and 2026-27 tuition are on our map of DC private schools.

When should you time the move?

Market timing

In Zillow's latest Washington metro data, homes took 35 days to go under contract, against 32 a year earlier. Listings rose to 19,259 from 17,595, and 28% of listings had a price cut. That means a bit more room to negotiate than a year ago, metro-wide. Freddie Mac's average 30-year rate was 7.28% in the week of October 1, 2026; jumbo loans price differently, so get a quote on the loan size you'll need.

Tax timing

If you'd live in Maryland or Virginia and work in DC, you pay income tax to your home state, not DC: the Home Rule Act bars DC from taxing nonresidents' income. DC taxes anyone domiciled in the District or keeping a home there for 183 days or more in a year, so the date you move can decide which jurisdiction taxes that year's income. If you're relocating mid-year, ask your CPA how the part-year rules work for both places. If you're selling a house elsewhere to fund the purchase, the sale date matters as much as the closing date here. And if you already own in Washington and are moving within it, start with our notes on selling a Georgetown home.

What are the steps for moving to DC?

1. Run the income and property tax comparison above with your own numbers, then confirm it with a CPA.
2. Decide house or condo, then neighborhood, using the Zillow split above as the starting point.
3. Run the DCPS lookup and check the WMATA trip planner on each address you'd offer on.
4. Look up the property's assessed value and DC's rate tier; estimate the bill before the homestead deduction.
5. After closing, register the car in DC and apply for a Residential Parking Permit if your block is zoned for one.
6. Ask your CPA about DC's estate tax: its 2026 exclusion is $4,988,400, a third of the $15 million federal one; the detail is on the DC estate tax guide.

When you're ready to see houses, start with what Georgetown homes cost, and I can pull recent sales on any block you're weighing.

Common questions

Sources

• DC Office of Tax and Revenue: Individual and Fiduciary Income Tax Rates
• Comptroller of Maryland: 2026 Maryland State and Local Withholding Information
• Virginia Department of Taxation: Tax Rate Schedule (TAXTABLE.pdf)
• DC Office of Tax and Revenue: Real Property Tax Rates
• Fairfax County: Board of Supervisors Adopts FY 27 Budget, Reduces Real Estate Tax Rate
• Arlington County: FY 2027 Adopted Budget
• DC Office of Tax and Revenue: Estate Tax / Sales Tax notice
• DC Office of Tax and Revenue: Notice of Oct. 1, 2025 Tax Changes
• DC Office of Tax and Revenue: Real Property Tax Reliefs, Credits and Deductions
• DC Code § 1-206.02 (Home Rule Act limits)
• IRS: What's new, estate and gift tax
• Zillow Home Value Index and metro market data via tools/data/georgetown.json (August 2026)
• Freddie Mac: Primary Mortgage Market Survey (week of October 1, 2026)
• DDOT: DC Circulator service ends (release)
• WMATA: Better Bus Network
• DC DMV: Residential Parking Permits
• DCPS: Find your in-boundary school (enrolldcps.dc.gov)
• MIT Living Wage Calculator: District of Columbia
• Washingtonian (reported): Private School Guide, Coed Schools, Oct 31 2025