It began back in the 1970s as a tool to discourage real estate speculators and to avoid assessments and increases in monthly charges. Today it is primarily a tool for co-op and condo boards to keep their reserve funds robust. And when it comes to setting one — and determining who pays it — there’s […]
MHH Condo/Co-op Digest Vol. VI, April 2024 (NY)
Court Of Appeals Decision Threatens To Upend NYC Property Tax System: On March 19, 2024, the New York State Court of Appeals issued a decision in Tax Equity Now NY, LLC v. City of New York et al., Index No. 153759/2017 (Sup. Ct. N.Y. Co.), opening up a path forward to challenging New York City’s […]
State Court Ruling Opens Door for Major Changes to NYC Property Tax System (NY)
A recent state court ruling has created a path toward major changes to New York City’s property tax system — albeit one that could have mixed consequences for co-ops and condos owners. In a 4-3 ruling, the New York Court of Appeals allowed a lawsuit alleging the city’s property tax system is unfair and illegal […]
How Condos are Reassessed (IL)
The job of the Assessor’s Office is to calculate a fair market value for your property. The market value is how much your property could sell for based on the current real estate market. For residential properties, including condos, your property’s assessed value equals 10% of its fair market value, per Cook County ordinance. Read […]
NYC pols urge Albany to OK tax break for ‘green’ mandate that could cost co-op, condo owners $20K
New York City Council members feeling the heat from thousands of angry co-op and condo owners are urging state pols to OK tax breaks over a new “green” mandate that could cost more than $20,000 per unit. The City Council had actually approved the mandate, the Climate Mobilization Emissions Law, in 2019 requiring residential buildings […]
2024 Property Taxes: Impact on Chicagoland Community Associations (IL)
Cook County properties are reassessed on a triennial schedule. Every three years, the new valuations – along with appeals, exemptions, local tax levies, and assessments of nearby properties – determine the amount of future property tax bills. Read the article…………………………….
Mayor Adams eyes NYC property tax breaks as co-ops, condos face crunch from ‘green’ mandate
Mayor Eric Adams said he’d consider property tax breaks for middle-class co-op and condo owners who have to pay for pricey building upgrades when a new “green” mandate icks in. Hizzoner said he was open to tax abatements as anxious residents brace for the costs of Local Law 97, which covers 800,000 co-op and condo […]
Important Tax Deadlines for California HOAs
While understanding tax deadlines and requirements is crucial for any HOA board, navigating through these can be complex and overwhelming. The intricacies of tax filings often require professional guidance to ensure compliance and avoid penalties. In California, HOAs are subject to various tax reporting and filing deadlines, each with its own set of requirements and […]
IN Tax Court dismisses appeal in Marion County, HOAs assessment dispute
A group of Marion County homeowners’ associations prematurely filed an appeal of their property assessment case’s dismissal at the administrative level, the Indiana Tax Court ruled in granting a motion to dismiss the appeal and remanding the case to the Indiana Board of Tax Review. Read the article………………………………..
Association Common Area Can Be Foreclosed and Sold to a Third Party for Unpaid Property Tax (NC/SC)
Our office has had two situations in the last six months where an association failed to pay property taxes on association common area, the tax department foreclosed, and a third-party bought the common area at the tax foreclosure sale. Fortunately in these cases it was not the association pool or clubhouse, but it could have […]
Are HOA Fees Tax Deductible?
If you’re a homeowner, then you’re probably familiar with the HOA, or Home Owners Association. Whether you love it or hate it, it’s an essential part of owning a home. An HOA is essentially an organization within a neighborhood or property that enforces rules and regulations. Read the article………………………………
Residents of East Garrison are coming to grips with taxes and fees that weren’t part of the sales pitch (CA)
Residents were concerned about a recent property tax bill that showed an approximate 40-percent increase in charges related to the CSD, which pays for ongoing services, in perpetuity, for things within the district like park maintenance. (One homeowner who shared their bills from fiscal years 2022-23 and 2023-24 showed a jump from $1,586 to $2,218 […]
Mo Money, Mo Problems? No Biggie for a Homeowner’s Association, Right? (NC)
Almost all community associations in North Carolina are formed as non-profit corporations, which are taxed as corporations. This means community associations should file an IRS Form 1120 (“U.S. Corporate Income Tax Return”) at the federal level. However, a community association may elect to be taxed as a “homeowners association” under Section 528 of the Internal […]
When Can HOA Fees Be Deducted From Your Taxes?
HOA fees are typical for homeowners, but can they be deducted from your taxes? The deductibility of HOA fees depends on various factors. We will provide an overview of HOA fees and taxes, explore the IRS regulations, and discusses potential exceptions and considerations for rental properties and small business owners. Read the article………………………..
Understanding IRS Rules on HOA Reserves: Ensuring Compliance and Financial Stability
As a critical aspect of Homeowners Associations (HOAs) and Community Associations, reserve funds are essential for covering future expenses and unforeseen repairs. However, it’s crucial to comprehend the impact of IRS rules on HOA reserves to ensure compliance and financial stability. In this blog post, we’ll explore the key IRS requirements related to HOA reserves […]
Community Associations and Tax Returns – Yes, You Need to File!
You may have heard rumors that because your community association is a non-profit organization, you are not required to file a tax return. Unfortunately, that is not the case. Even though your association may not owe any taxes, you still need to file federal and state (as applicable) tax returns. Read the article………………………..
Most new Ascension neighborhoods have little-known extra road tax (LA)
If you’ve bought a house in the newest neighborhoods of Ascension Parish over the past two years, you’re probably paying extra property taxes for the long-term maintenance of roads where you live. Read the article………………………..
Illinois Common Interest Communities and Condo Associations Can File Property Tax Appeals on Behalf of Unit Owners
Anyone who has ever owned property in Illinois understands that there exists a potentially never-ending cycle of property tax appeals and assessments because real estate is subject to being re-evaluated or re-assessed either on a 3-year or 4-year cycle depending on which county the property is located. Even further, if there are changes made to […]
U.S. Supreme Court to weigh legality of Hennepin County keeping revenue from seized properties (MN)
The U.S. Supreme Court has agreed to take up the case of a Minneapolis woman in her 90s whose condo was seized by Hennepin County because she didn’t pay her property taxes. The 2015 seizure of Geraldine Tyler’s condo isn’t in question. Nor is the fact that she owed the county some $15,000 in back […]
Gov. Kathy Hochul vetoes bill to close NY tax loophole for condo owners
New York Gov. Kathy Hochul has vetoed a bill that would have closed a loophole in state law that gives tax breaks to owners of big suburban homes classified as condominiums. Read the article………………………..
HOA Tax Returns: Can Your HOA Not File It?
For most organizations, tax season is one of the most stressful times of the year. Homeowners associations are no exception. Here is what you need to know about HOA tax returns. Read the article………………………..
IRS audits Lake Forest POA (AL)
It’s been a tumultuous time in Lake Forest with a faction of homeowners publicly questioning the property owners’ association board and alleging improper financial dealings. Read the article………………………..
What Does IRS 528 Say?
When it comes to federal taxes, many homeowners associations find themselves in a bind. While HOAs are required to pay taxes and file tax returns, they fall into a specific category under the Internal Revenue Service — IRS 528. Read the article………………………..
What Does IRS 528 Say?
When it comes to federal taxes, many homeowners associations find themselves in a bind. While HOAs are required to pay taxes and file tax returns, they fall into a specific category under the Internal Revenue Service — IRS 528. Read the article………………………..
Bill passed by the state legislature looks to close condo “loophole,” what’s next? (NY)
The days of an unofficial property tax discount for certain new build condos could be numbered as Governor Hochul weighs signing legislation that would stop some full-size homes from qualifying. Read the article………………………..
Tax Bill Implications for Condominium Conversions (MA)
Purchasers of units in recently converted condominium buildings need to take measures to ensure that they are staying current with their property tax obligations. The subject building will be taxed as a single-dwelling property until the conversion is accurately reflected in the City of Boston’s tax bills, which can take several months. Read the entire […]
Questions About Filing Your Association’s Federal Income Taxes? We’ve Got Answers
It’s everyone’s favorite time of year again! No, winter is no picnic for those who aren’t fans of cold weather. But the beginning of the year comes with more than just frigid temperatures and a lack of daylight. It also heralds in the menace known as tax season. Read the entire article……………………………….
Tax Abatement Crunch Time: When Must Coops and Condos Pay Their Employees Prevailing Wages? (NY)
Certain cooperatives (coops) and condominiums (condos) that wish to be eligible for the coop and condo property tax abatement are in a mad dash to submit the newly required prevailing wage affidavit. Read the entire article……………………………….
The Dos and Don’ts When it Comes to HOA Taxes
As the tax season is fast approaching, ensuring that you settle your homeowner’s association taxes is your primary focal point. As a board member, you should tackle your HOA’s taxes, among other financial management roles. Taking care of your HOA’s taxes helps improve its financial stability by avoiding extra penalty costs. The problem is that […]
Questions About Filing Your Association’s Taxes? We’ve Got Answers.
It’s everyone’s favorite time of year again! No, winter is no picnic for those who aren’t fans of cold weather. But the beginning of the year comes with more than just frigid temperatures and a lack of daylight. It also heralds in the menace known as tax season. Let’s face it – filing taxes is […]
Condo Column: NH bill proposes a tax break for condo owners
Thanks to a client of mine, I learned about pending legislation in the New Hampshire Legislature this year that rightfully should be very helpful to condominiums. But let me first give some background. Read the entire article……………………………….
Questions About Filing Your Association’s Federal Income Taxes? We’ve Got Answers (NC)
It’s everyone’s favorite time of year again! No, winter is no picnic for those who aren’t fans of cold weather. But the beginning of the year comes with more than just frigid temperatures and a lack of daylight. It also heralds in the menace known as tax season. Read the entire article……………………………….
Atlanta sued over allegedly ‘illegal taxes’ posing as waste fees (GA)
Atlanta is facing litigation from condominium owners seeking relief from the city’s years-old annual garbage fees. In 2019, the city’s annual frontage fees for trash pick up and street sweeping increased to a range of $500 to $12,000 per property for commercial or multi-family developments, according to the complaint filed in Fulton Superior Court in […]
Justices find defunct tax appeal forms proper in HOA common area dispute (IN)
A dispute involving the use of a now-defunct tax appeal form challenging assessments to three Marion County homeowners’ associations common areas over several years was partially reversed by the Indiana Supreme Court on Thursday. Read the entire article……………………………….
Taxes and Your Homeowner Association (CO)
Today’s homeowner is savvy and aware of the tax implications of homeownership. Deductions for mortgage interest and real estate taxes are common topics of conversation, however, taxes paid by the HOA are often left out of the discussion. It is easy to assume that HOAs are tax exempt, but the IRS disagrees. The HOA could […]
HOA’s and Sales Tax Exemptions (TX)
In Texas, property owners associations (“Associations”) are typically non-profit corporations created under Chapter 22 of the Texas Business Organizations Code. As a result, many Associations want to know if they qualify for certain tax exemptions reserved for non-profit entities, which can be significant over the life of the Association. Texas tax law provides an exemption […]
Builders defend tax law that gives condo owners a break; critics look to close ‘unfair’ loophole (NY)
Sean and Linda Walsh live in a ranch-style home along a bike trail and on the edge of Lorall Lake in Lancaster. Their assessment is $540,000, a figure that matches the home’s fair market value. Just 4 miles away, a similar home has the same $540,000 market value but an assessed value of $328,000. So, […]
Warrenton working to correct miscalculations in stormwater utility fees (VA)
Town of Warrenton officials have discovered miscalculations in their assessment of stormwater utility fees in at least one subdivision and are working to correct the errors. The discovery came as residents of the Olde Gold Cup Association, Inc., the subdivision’s homeowners association, questioned town officials about utility fees on their tax bills that did not […]
IRS on Homeowner Associations
A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development may be exempt as a social welfare organization if it is operated for the benefit of all the residents of the community. Read the article………………………………..
The Use of Form 1099-MISC and 1099-NEC for HOAs and Condos Explained
Your condo or HOA hired a lot of vendors and made plenty of disbursements this past year. These vendors were not employees of the association yet were paid substantial sums of money over the course of the year for the goods and services they provided. The IRS requires that businesses, even “not for profit” businesses […]
Why Do HOAs Need To File Form 1099 MISC?
Tax season is always hectic and confusing, especially if you have no experience with it. Like many other organizations, homeowners associations also need to file Form 1099-MISC, even if you are classified as a non-profit. Learn more about this important IRS form below. Read the article………………………………
Community Associations and Property Tax Appeals: 7 Things You Should Know
As an Illinois property owner, it’s unlikely you have remained unaffected by the current state of property taxes. However, unlike other costs involved with owning property (like mortgage payments or utility bills), tax assessments can and should be appealed. Read the article…………………………………..
Co-ops and Condos Are Avoiding Property Tax Delinquency (NY)
Unpaid property taxes in New York City are soaring as homeowners struggle and the pandemic recession slashes the rents landlords are collecting from both commercial and residential tenants, The City reports. The property tax arrears rose to $1.3 billion in February – 4.5% of the almost $30 billion due, according to figures released by city […]
The Perfect Storm: 2021 Property Taxes and Chicago Community Associations (IL)
Due to the impact of the COVID-19 pandemic, there have been massive declines in state sales tax and local income tax revenues. In order to restore operating budgets, states are looking to property taxes to close the gaps. Illinois is no exception. Read the article……………………………….
HOA Tax Returns: What You Should Know
The process of filing HOA tax returns is actually simpler than one might think, and our goal is to help the board better prepare for tax season! Here are a few answers to common questions regarding HOA taxes: Read the article…………………………………
Tax Returns for HOAs and Condos Explained
The annual tax return is a confusing topic for many HOAs and condominium associations. State and federal statutes require all associations to file tax returns every year. But that doesn’t mean that all do and that creates a risky situation for any association that doesn’t file. Let’s take a look at the rules, risks, and […]
Are HOA Fees Tax Deductible?
A homeowners association runs a community by imposing certain rules, preserving its aesthetics, and maintaining various aspects of the neighborhood. It does this with the help of HOA dues — fees that the association collects from members. These fees are used to fund the association’s maintenance and operations. Read the article……………………………..
Ho Ho Ho!!! Are You Ready for Tax Season?
Many believe that associations are not required to pay taxes because they are non-profit corporations. However, in most cases, that is not accurate. In order for an association to be exempt from taxes, it must qualify as a tax-exempt entity under Section 501(c)(3) or (4) of the Internal Revenue Code. Read the article……………………………
A Tax Break on Condo Assessments
I live in a condo that is 20 years old, and we are now faced with major projects, including replacing the roof. If the condo board charges owners a special assessment for these costs, can we apply that amount to help lower the tax bill when we sell our condos? – Read the entire article……………………………….