What is the difference, if any, between how condo owners and co-op owners take home mortgage deductions?

Asked by Ramona Weaver, Washington, DC Sat Jan 28, 2012

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Charles Klein, Agent, Derwood, MD
Sat Jan 28, 2012
Good Morning Ramona,

Certainly the question regarding the deductibility of the mortgage interest and other typical and usual deductions is a good one and the answer is, yes you certainly are allowed to deduct the interest from both the primary loan that you may take on and the interest for any underlying mortgage the building may have and a new owner will assume as part of their financing, if one exists.

I would offer that the larger considerations one may want to incorporate when over viewing condo vs. CO-OP Purchases are the following: Building rules and how they affect your goals and expectations, resale fungibility, building and CO-OP trends and how they compare to like condos in same area. Building recognition agreements with lenders and how that may affect your purchase and or when one intends to resell.

Much like many considerations relating to the best Real Estate decisions’, the answer is usually launched from an “It Depends platform”, one that collaborates with the purchaser to best identify your goals, intentions and defined parameters to define the best realistic options.

Kindly contact me if I may provide you with a next step approach to your search.
Thank you for your inquiry

Charles Klein
Principal Broker-MD,DC /SR,VP Brokerage
RE/MAX Allegiance
Georgetown
Washington DC
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202-338-8900 Office
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Kate Foster-…, Agent, Chevy Chase, MD
Sat Jan 28, 2012
Ramona,

That's an excellent question. Having owned both condos and co-ops, I can let you know there is no difference in how you deduct your personal mortgage. However, co-ops often have underlying mortgages as well. This is money the co-op has borrowed on the building. In that case, the principal and interest are included as part of your monthly co-op assessment. You are then given a document from the co-op at year end showing your prorated share of principal and interest payments to use as back up for this additional tax deduction. Property taxes are reported in the same way, as they are also typically included in your monthly assessment for co-ops.

Please feel to contact me if you have any additional questions on owning a co-op.

All the best,

Kate Foster-Bankey

TTR Sotheby's International Realty
1206 30th Street NW
Washington, DC 20007
(202) 340-7222 (mobile)
(202) 333-1212 (office)
kate.foster@sothebysrealty.com
http://www.ttrsir.com
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Gerald Seega…, , Washington, DC
Sat Jan 28, 2012
When buying a coop, you usually have to be approved by the board before the sale can go through. You do not have this hurdle when buying a condo. When you buy a condo, you own your unit but when you buy a coop, you actually own a share of the building.


I will leave the financing details to someone else as it has been quite a while since I have worked on a coop deal and I have to imagine that the financing landscape has changed since then.
Web Reference:  http://www.urbanerealty.com
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