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October 2, 2009
Property Taxes and Co-ops
I am about to purchase a co-op and am really confused about how real estate property taxes will work. Are my property taxes 100% covered in the monthly maintenance? I also hear that the tax portion of the maintenance is then tax deductible. Finally, I hear that it is beneficial to close late in the year for tax purposes - why is this so?
Anyone can shed some light on these questions for me?
Comments
Yes, in a coop the property taxes for the coop are covered in the maintenance. You don't pay property taxes individually since you don't own property--you own shares in a corporation. The corporation owns the property (the whole building) and is taxed accordingly.
Yes, the property tax portion and the interest on the coop's underlying mortgage (if any) are deductible. You will get a statement from the coop's acct advising you how much, shortly after the ending of the fiscal year.
Not sure about closing, presumably so you can capture the entire next year's tax deductions.
Posted by: denton at October 2, 2009 6:53 AM
No matter when you close, you can only claim the tax deduction to which you are entitlted (% of the year that you owned).
Posted by: BH76 at October 2, 2009 8:55 AM
Both denton and BH76 are 100% right.
Posted by: Kensingtonian at October 2, 2009 9:15 AM
also, be sure to file whatever paperwork it is for homeowner for reduction of real estate taxes with the state.
STAR program.
Posted by: Petebklyn at October 2, 2009 9:47 AM
This is amazingly helpful! Thank you!
Posted by: Suntory at October 2, 2009 6:49 PM
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