Condominium unit owners with parking spaces may receive a tax break beginning in July, according to the Department of Finance and Revenue of the District of Columbia government.

A notice of proposed rulemaking was published in the May 15 District of Columbia Register, which would clarify the definition of "dwelling unit" to include certain residential garages and condominium parking spaces. If the proposed rules are adopted, a unit owner with a parking space will receive the Homestead Exemption on the parking space, if the unit owner is an owner-occupant.

Currently in the District of Columbia, there are three different property classifications for real estate tax purposes.

Class I is residential property with the Homestead Exemption. This exemption is available to persons who actually are residing in their home, cooperative or condominium apartment. The tax rate currently is $1.22 for every $100 of the assessment.

Class II is for residential property without the Homestead Exemption credit and for apartments. The tax rate is $1.54 for every $100 of the assessment.

Class III is for all other property that does not fall into either Class I or Class II. This class also covers vacant lots, other than those which are next to a residential property -- called "abutting lots." For those vacant abutting lots that are next to a residential property, the District has classified them the same as the property they abut. The tax rate for Class III is $2.13 for every $100 of the assessment.

Homeowners who live in their property and also own a vacant abutting lot are given the benefit of the Homestead Class I exemption for both lots Condominium unit owners, however, who own parking spaces in their own building currently are taxed by the District government in the Class III category.

The purpose of the proposed rule-making is to include in the term "dwelling unit" for Homestead exemption purposes, "any residential garage or any condominium parking space, whether such parking space is enclosed or not, actually used or held for use by the owner-occupant . . . of said dwelling unit, for the parking or storage of motor vehicles belonging to said owner-occupant if said residential garage or condominium parking space:

"(a) is located within the same structure as the dwelling unit, or is located on a lot which abuts the dwelling unit: and

"(b) has common ownership with the dwelling unit; and

"(c) is used concurrently with the dwelling unit by the owner-occupant of the dwelling unit."

When this matter was first called to the attention of the District of Columbia government by many condominium unit owners, the Department of Finance and Revenue promised to review the obvious inequity.

Legislation also has been introduced to correct the inequity by Council members John Wilson, Polly Shackleton, Betty Ann Kane, John Ray, and David Clark. It would appear from the proposed rulemaking that this legislation will not be necessary if the Department of Finance and Revenue gives final approval to its proposal.

The District has given several examples of the applicability of the proposal. According to the District:

"Example (1). X owns and occupies a single unit detached house. On an abutting lot, X owns and parks his automobile in a residential garage. X's garage is included in the dwelling unit for purposes of classification in accordance with the Act and these regulations, since the garage is owned by X in common with the dwelling unit, and said garage is used by X for parking his motor vehicle concurrently with his use of the dwelling unit. In this example, X's dwelling unit and garage are classified as Class One."

The District is asking for written comments until June 15. Comments may be sent to the Division of Real Property Taxes, Post Office Box 176, Benjamin Franklin Station, Washington, D.C. 20044.