Co-op Maintenance Tax Deduction Calculator

Mortgage Interest Deduction (Per Share)

Real Estate Tax Deduction (Per Share)

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Total Annual Co-op Tax Deduction
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Glossary

Mortgage Interest Tax Deduction

Pursuant to the provisions of Section 216 of the Internal Revenue Code, a tenant stockholder of a cooperative housing corporation is entitled to an itemized deduction for a proportionate share of interest paid or accrued by the housing corporation (co-op). These deductions are only available if you itemize deductions on your personal income tax return. If you owned your shares for less than the entire calendar year, you must prorate your deductions; otherwise multiply the number of shares owned by you by the amount per share. Should you have any questions regarding the application of the equivalent per share deductions in your tax returns, please consult your personal tax advisor.

Real Estate Tax Deduction

The proportionate share of real estate taxes eligible for pass-through to stockholders is based on the gross amount of real estate taxes paid or incurred by the Corporation. This deduction is only available if you itemize deductions on your personal income tax return. Present and past stockholders who were not stockholders of the Corporation for the entire year of 2018 are entitled to a proportionate share of the deductions for the period of their ownership.

The per share real estate tax deductions on the annual co-op tax deduction letter are usually not adjusted for the benefits qualified stockholder may have received pursuant to the New York City Coop/Condo Real Estate Tax Abatement Program, Veteran’s Property Tax Exemption, Senior Citizen Exemption and State School Tax Relief Program. Those qualified Stockholders who received credits for these abatements and/or exemptions should consult their personal tax advisor to determine the adjustment to be made to reduce their real estate tax deduction by the credits received.

Should you have any questions regarding the application of the equivalent per share deductions in your tax returns, please consult your personal tax advisor.

Monthly Maintenance

Co-op shareholders make one maintenance payment each month to contribute towards the operating costs of the co-op as well as real estate taxes. Unlike for condos whereby each owner pays individual property taxes, a co-op corporation pays taxes to NYC on behalf of all owners and the entire building. Therefore, condo owners have two separate monthly payments: common charges as well as property taxes. We compare condo common charges and co-op maintenance payments in this article.

FAQ

Are co-op maintenance fees tax deductible in NYC?

Partially. A percentage of your monthly co-op maintenance is tax deductible. The exact amount you can deduct depends on the number of co-op shares owned as well as the amount of real estate taxes and mortgage interest paid by your co-op. Multiply the number of shares assigned to your unit by the per-share deduction amount for both real estate taxes and mortgage interest listed on the annual Form 1098 distributed to shareholders.

What determines % of maintenance that’s tax deductible?

The percentage of tax deductibility depends on the amount of real estate taxes and mortgage interest paid by your co-op. Tax deduction percentages vary by co-op building, as each has a different property tax liability and underlying debt structure. A typical co-op in NYC has a tax deduction percentage of 30% to 50%.

Is it possible to reduce my buyer closing costs in NYC?

Yes. You can reduce your buyer closing costs and save up to 2% on your purchase by requesting a buyer agent commission rebate through Hauseit. Rebates are a legal and non-taxable way to reduce your buyer closing costs while receiving traditional, full-service representation from a seasoned buyer’s agent throughout the purchase process.

How much are seller closing costs in NYC?

Seller closing costs in NYC are between 8% to 10% of the sale price. Closing costs include a traditional 6% broker fee, combined NYC & NYS Transfer Taxes of 1.4% to 2.075%, legal fees, a building flip tax if applicable as well as building and miscellaneous fees. Save up to 6% when selling through Hauseit’s Assisted FSBO Listing Service, or consider 1% Full Service for a traditional yet lower cost sale experience.

Last Updated: 4/21/20
Disclosure: Hauseit® and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. No representation, guarantee or warranty of any kind is made regarding the completeness or accuracy of information provided. Hauseit LLC is a Licensed Real Estate Broker, licensed to do business in New York under license number 10991232340. Principal Office: 148 Lafayette Street, New York, NY 10013.
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