Understanding Estate and Inheritance Taxes in DC, Maryland, and Virginia: What Homeowners Should Know

Estate planning involves more than deciding who inherits your home. Understanding how estate and inheritance taxes work can help homeowners and their families prepare for the transfer of property and other assets.

While Washington, DC, Maryland, and Virginia share a regional housing market, their estate tax laws differ significantly.

Estate Tax vs. Inheritance Tax: What’s the Difference?

An estate tax is assessed against a deceased person’s taxable estate before assets are distributed to beneficiaries.

An inheritance tax applies to certain beneficiaries who receive assets from an estate.

The distinction matters because an estate may be subject to one tax, both taxes, or neither, depending on the jurisdiction, estate value, and beneficiaries.

Estate Taxes in DC, Maryland, and Virginia

Here is how the three jurisdictions compare for 2026:

Jurisdiction	Estate Tax Exemption	Inheritance Tax
Washington, DC	$4,988,400	None for deaths since April 1, 1987
Maryland	$5 million	10% for certain beneficiaries
Virginia	No state estate tax	Generally none

Washington, DC

DC imposes an estate tax on taxable estates exceeding its 2026 exemption of $4,988,400. Tax rates are graduated, reaching 16%.

DC does not impose an inheritance tax on estates of individuals who die under current law.

Maryland

Maryland has both an estate tax and an inheritance tax.

The estate tax exemption is $5 million, with a maximum estate tax rate of 16%.

Maryland also imposes a 10% inheritance tax on certain beneficiaries, including nieces, nephews, and unrelated individuals. Spouses, children, parents, siblings, and several other qualifying relatives are generally exempt from inheritance tax.

Virginia

Virginia does not currently impose a state estate tax or a general inheritance tax.

However, federal estate taxes may still apply, and certain historical inheritance interests remain subject to special rules.

What About Federal Estate Taxes?

For 2026, the federal estate tax exemption is $15 million per individual.

This means an estate may fall below the federal threshold but still be subject to estate taxes in DC or Maryland.

Estate tax calculations can also depend on prior taxable gifts, deductions, marital provisions, and other circumstances.

What Should Homeowners Consider?

Real estate is often one of the most valuable assets within an estate. Several factors deserve attention:

• Property valuation: A home’s fair market value may contribute significantly to the estate’s total value.
• Multiple properties: Vacation homes, investment properties, and real estate owned in other jurisdictions can create additional considerations.
• Ownership structure: How property is titled, including ownership through trusts, can affect its transfer and administration.
• Inherited property sales: Selling an inherited home may involve capital gains tax considerations separate from estate or inheritance taxes.

Understanding these distinctions is particularly important for families whose real estate holdings span DC, Maryland, and Virginia.

Planning With Clarity

Estate planning is an important part of preserving and transferring wealth. For homeowners, understanding the value of their real estate and how it fits into their broader estate is a useful starting point.

Working with a qualified estate planning attorney and tax professional can help families evaluate their individual circumstances.

If you’re preparing to sell an inherited property or evaluating real estate as part of an estate transition, I can provide guidance on property valuation, market preparation, and the real estate sales process.

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Disclaimer: This article is provided for general informational purposes only and does not constitute legal, tax, or financial advice. Kimberly Diggs is a licensed real estate professional, not a tax advisor or attorney. Tax laws and exemptions are subject to change, and individual circumstances vary. Readers should consult a qualified estate planning attorney, CPA, or tax professional regarding their specific situation.