The Residential Building Permit Classification Amendment Act of 2025 aims to streamline the process for changing the classification of commercial properties to residential use in the District of Columbia. The bill introduces an application process for property owners seeking to reclassify their properties as Class 1A Property, which is designated for nontransient residential purposes. It establishes specific tax implications based on the timing of the classification change and mandates that property owners provide complete documentation to substantiate their application. Additionally, the bill allows for appeal rights if an application is denied and includes provisions for a clawback if the property is not utilized for residential purposes within a specified timeframe.

Key amendments to the existing law include the redefinition of Class 1A Property to encompass properties with building permits for new construction or substantial rehabilitation aimed at residential use. The bill also introduces a new subsection that outlines the tax treatment for newly classified properties based on the timing of their reclassification. Furthermore, it allows property owners to appeal denials of their classification changes and provides the Chief Financial Officer with discretion to grant extensions or waive penalties in cases of undue hardship. The act is set to take effect on April 1, 2025, following the necessary approvals.