The Kuwaiti government has acquired 10 houses just north of Foxhall Village, all clustered in a development beside Glover Archbold National Park and with a total value of $36 million.

The sites, along Foxview Circle and Hoban Road and owned by the Embassy of the State of Kuwait, were acquired in 2012 and 2013, according to D.C. tax records, which show assessed values on the properties ranging from $3.2 million to $4.3 million. Kuwait’s embassy is on Tilden Street, just east of Connecticut Avenue.

The acquisitions represent an expansion of holdings by foreign governments of Foxhall Village-area properties. What this might mean for the community and future development is uncertain. In at least one way, the effect of the special circumstances of the ownership is plain.

All of the sites are exempt from D.C. property taxes, status authorized by the U.S. State Department. Asked by PotomacTimes about its decision regarding the Kuwait Embassy-owned houses, a State Department official said in an e-mail that public information on the D.C. tax and revenue website “shows each of the properties are exempt on the basis of use as a staff residence of the Embassy of the State of Kuwait.” An inquiry about the purpose of the houses was submitted by PotomacTimes to the Kuwait Embassy and received no response.

Kuwait sits at the northern tip of the Persian Gulf, next to Saudia Arabia, Iraq and Iran. In 1991, the United States went to war in “Operation Desert Storm” to repulse an Iraqi invasion of Kuwait.

The State Department has gained wide latitude with tax exemption, though not without contest, including in federal court. In one key case, New York City won a court decision to collect taxes and enforce liens for unpaid taxes on certain lower-level staff residential space inside foreign mission office buildings. Among the missions involved was India’s to the United Nations, and the tax bill, including interest, amounted to $42 million. But a federal appeals court, in 2010, rejected the lower court’s judgment, backing the State Department’s exemption power and retroactive action, according to the decision, posted on FindLaw.com.

However, the appeals court noted that international diplomatic conventions leave the scope of such exemptions “decidedly ambiguous.”

There are 612 properties in D.C. that carry the foreign government exemption, according to the D.C. tax and revenue office. The assessed value on those properties — which include the German Embassy and the French Embassy at long-established sites near Foxhall and Reservoir roads — totals about $3.4 billion.

How those figures might have changed from year to year in D.C. over the past decade is unclear. “We do not have the trend lines you requested,” David Umansky, public affairs officer for the D.C. Office of the Chief Financial Officer, stated in an e-mail.

New D.C. residential property tax bills are coming. Residential properties in D.C. were reassessed to reflect “current market values” as of January 1, 2017, according to the city’s tax and revenue office, which noted an average increase of 5.52 percent. Every penny that is exempt is a penny that tax-paying property owners are liable for covering.

A type of quid pro quo is at work with foreign missions. As described by the 2010 federal appeals court decision, which the U.S. Supreme Court declined to consider, the Foreign Missions Act of Congress in 1982 was intended to give the State Department wide discretion to balance benefits, privileges and immunities granted to foreign missions to the United States with how U.S. missions are treated abroad. The appeals court, citing a 1981 U.S. Senate report, notes several countries, including Kuwait, had restricted the State Department’s ability to purchase or own housing, and that other countries restricted shipments of private vehicles of diplomats or required that purchases of maintenance services or tickets to cultural events go through government agencies at a substantial surcharge.

Categories available for property tax exemption appear on the State Department’s website. They include diplomatic mission offices and annexes, a head of mission’s “primary residence” and temporary lodging for “representatives or employees.”

Source: U.S. State Department website

Recently, the drawing of the exemption lines took a twist around who owns the property. According to an April 20, 2017 State Department notice, a consular post head’s primary residence that is owned by the head of the post “is no longer eligible for exemption from real estate taxes.” The notice goes on to say that any such property that “currently enjoys real estate tax exemption, will lose this exemption effective January 1, 2018.” Are new tax collections in store? Perhaps, unless, according to the notice, exemption is part of a “bilateral treaty or reciprocal practice.”