Do You Pay Property Tax on Condos? Info on Condominium Expenses
There are definite benefits to condominium life, like on-site security and maintenance staff, luxurious building amenities, a built-in community, and proximity to downtown areas and their entertainment and nightlife options.
Don't expect to dodge paying property tax. You have to pay property tax on condos, and depending on the property value and the tax rates in the area, that property tax may end up costing more (or less) than a single-family home nearby.
That said, you might not have to worry about making additional payments every year on top of your usual mortgage payments. Many mortgage lenders set up mortgages with escrow accounts that collect money from each mortgage payment and then pay property taxes on homeowners’ behalf.
You will have to pay property taxes on condos.
Philip Askeroth, co-founder of the Brooklyn-based online for-sale-by-owner network REALICITY, told Quicken Loans recently that prospective condo buyers should research a development’s property tax situation before signing on the dotted line. Some developers, for example, may have gotten tax breaks that are scheduled to expire soon.
“Do you have a good understanding of your annual property taxes?” Askeroth says. “Building developers are often granted tax abatements that lower taxes for a predetermined time, 5, 10 or even 20 years. If the condo you are considering has a tax abatement, your taxes will gradually increase every year.”
Property taxes for condos and townhomes may be lower than they are for single-family homes.
Realtor.com reports that condos and townhomes are typically subject to lower property taxes than single-family homes, due in part to differences in square footage that goes into an assessor’s calculation of your home’s assessed value.
“A condo or townhouse has less space per taxpayer than a single-family home,” Richard M. Prinzi Jr., a CPA and the co-founder of F-Sharp Tax Management Services, tells the site. “In a condo living situation, many taxpayers will share in the tax due for the land and the common areas.”
But Glenn Carter, a real estate investor and the owner of Condo.Capital, told Quicken Loans that the property taxes for a $200,000 condo and a single-family home at the same price.
But don’t forget about the HOA fees.
Condo owners often have to pay HOAs (homeowners association fees), as do owners of single-family houses in certain neighborhoods, subdivisions, and gated communities.
“Depending on the townhome or condo community, you may have an association that has a pool and a tennis court, and someone has to pay for the upkeep of that,” Mary Jo Fiore-Posterli, a Coldwell Banker realtor in Lake Forest, Ill., explains to Realtor.com.
So, long explainer short, if you own a condo, you’ll likely have a mortgage bill and HOA fees to pay every month and property taxes to pay at yearly, biyearly, or quarterly intervals. The property tax payments may come from any escrow account to which your mortgage payments contribute. Still, with the amenities and conveniences that condo developments can offer, the outlays just might be worth the expense.