In most cases, you’ll pay property taxes on a condo the same as buying any other home.
What are the condo property tax rules?
Most states don’t have separate property tax rules for condos. You simply pay property taxes on any real property that you own.
If your state has tax benefits for a primary residence, condos can qualify if they’re your main home. Typical rules include living there for more than half of the year.
If you have a vacation condo that you rent out for most of the year, you may be subject to higher property taxes as a business or rental property compared to a primary residence or second home.
Do condo associations pay property taxes?
Condo owners usually pay property taxes at least for their own units. You’ll usually pay these taxes directly to the government not through your condo dues.
The rules on who pays property taxes for common areas vary by state and sometimes by how your condo association is set up.
Sometimes, the condo association pays property taxes on common areas and includes the expense in owner dues. Other times, condo owners are assessed property taxes based on the value of their unit plus a share of the common areas.
Your condo association’s accountant can help you understand the rules for your area.
Do condo owners pay more or less in property taxes?
Condo owners usually pay the same property tax rates as owners of standalone houses. The only variation is usually for things like a primary residence versus a rental property.
In many places, condo values are lower than single-family home values so property taxes for condo owners are lower on average. The difference in value is usually because condos are smaller and share common areas.
Desirable condos in places like beach communities or luxury buildings may have above-average property values and wind up having a higher property tax bill.
Property taxes can also vary by city or county. So if you’re comparing condos inside the city limits versus a house outside the city limits, that can also affect your potential property taxes.
Can you homestead a condo?
Most state homestead laws, such as Florida’s homestead tax benefit, don’t distinguish between condos and single-family homes.
If you meet the requirements for homestead, such as making your condo your primary residence, you can usually homestead a condo.
What happens if a condo owner doesn’t pay property taxes?
If a condo owner doesn’t pay property taxes, the usual process for late property taxes applies. This often includes a period of time to pay the taxes plus a penalty.
If the taxes remain unpaid, the condo may be subject to a tax lien and eventual tax sale. If it’s difficult to sell condos in your market, the tax sale may result in a selling price below market value.
Condo boards may or may not retain their usual right to approve the buyer in a tax sale. The board should contact a condo association lawyer if this is a potential issue.
Can you deduct property taxes for a condo?
You can generally deduct property taxes for a condo as an itemized deduction the same way you can deduct property taxes when buying a single-family home.
One thing to note is that you typically need to pay the tax. If your condo association pays property taxes for common areas out of general owner dues, you may not be able to take a deduction for that portion even though part of your dues went to taxes.