This article was originally published in 2019, but has been updated to reflect the cost of living in the Washington DC area for 2023.
What is The Cost of Living in the Washington DC Area?
Everyone knows that the DC area is an expensive place to live. Real estate prices and property taxes are among the highest in the nation. Not to mention that everyday necessities like groceries and gas cost more here, making the cost of living in the Washington DC area quite steep.
Within the DC area, certain cities are more expensive than others. Here we’ve outlined the cost of living in the Washington DC area using various tax rates (property, income, and car) for the major nearby jurisdictions in Virginia and Maryland, plus the District.
PROPERTY TAX RATES
All property tax rates are per $100 of assessed home value.
Falls Church City – $1.32
Manassas City – $1.135
Fairfax County – $1.11
Loudoun County – $0.98
Alexandria City – $1.11
Fairfax City – $1.075
Arlington County – $1.013
Prince William County – $1.115
Montgomery County – $ .89 base plus*
*each jurisdiction has other fees added. This chart outlined the rates for each area.
Prince George’s County – varies by jurisdiction.
Washington DC $0.85
Be sure to read our related post on property taxes and their benefits.
STATE INCOME TAX
State-level income tax rates are not standardized like the federal government’s. In fact, several states do not even have an income tax, relying on other funding sources for their service and programs.
In 2023, our local state income tax rates are:
Maryland: 2 to 5.75 percent. The highest rate applies to incomes over $250,000.
Virginia: 2 to 5.75 percent. The highest rate applies to incomes over $17,001.
DC: 4 to 10.75 percent. The highest rate applies to incomes over $1 million.
Virginia is the only state of the three to levy a personal property tax, or as it is more commonly known, “car” tax. In fact, Virginia’s car tax is actually the second highest of the states that do charge a car tax, second only to Rhode Island. Virginia residents pay a 4.15% Sales and Use Tax. On average, Virginians pay $966 a year in vehicle-related taxes.
THE BOTTOM LINE
While the District has the highest state income taxes, they are offset by relatively low property tax rates. Montgomery County property taxes vary greatly depending on the jurisdiction. Be sure to check the specific rates of the various jurisdictions you’re considering – they can make a big difference in your monthly housing costs.
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