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How Property Taxes Compare in New York City’s Co-Op and Condo Buildings

Your tax bill may vary depending on the type and size of building you live in.

Q. Can you explain the property tax differences in buying a condo or a co-op in New York City?

A: Ownership structure works differently in co-ops versus condos, and therefore the structure and amount of your tax bill in either type of building will work differently, as well.

“In a co-op, the building is owned by a corporation and the people who live in the building get shares of stock in the corporation and proprietary lease [when they buy an apartment],” said Steve Wagner, an attorney with Adam Leitman Bailey, P.C. New York Real Estate Attorneys. “With regard to taxes, there is one bill that goes to the corporation.”

For co-op shareholders, the cost of the building’s total tax bill is baked into monthly maintenance charges, as opposed to a standalone individual tax bill.

“In a condo, the board doesn’t own anything,” Mr. Wagner said. “It’s as if instead of one big building you’ve divided it into many separate tax lots. Each apartment is separate, so taxes are paid by the individuals who own the apartment rather than the corporation.” In a condo, then, owners pay a separate tax bill in addition to their monthly common charges for building maintenance.

“That’s one of the reasons condos are more expensive than co-ops,” Mr. Wagner added. “The amount of monthly maintenance you have to pay is lower. But on the other hand, you have to pay your own taxes.”

For the full article on Mansion Global

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