Taxation Of Condominiums

Each condominium apartment is subject to separate assessment and taxation as it is important for the unit’s owner to obtain Federal Housing Administration (“FHA”) insurance.  Such taxes, assessments and charges shall constitute a lien only upon the unit and upon no other portion of the condominium property. All laws authorizing exemptions from taxation or deductions from tax bills shall be applicable to each individual unit to the same extent; they are applicable to other separate properties.

Pursuant to the FHA regulations, no mortgagee shall be eligible for FHA insurance unless and until the family unit is assessed and subject to assessment for taxes pertaining only to that unit.  The common areas of a condominium are valued as a whole assessed on a pro rata basis to the individual unit holders.

However, common element of condominium development is valued as a whole and assessed on a pro rata basis to the individual unit holders.  However, there can be exceptions.  In Tower W. Apt. Asso v. W. N.Y., 5 N.J. Tax 478, 479 (App.Div. 1982), the Tax Court held that the parking garage was not set forth as a common element and was never considered as a part of the common elements.  Since the garage was not set forth as a common element in the governing documents, neither the Association nor the garage was entitled to the protections of N.J.S.A. 46:8(B)-19.

A condominium project, like a normal subdivision, is assessed as a single parcel to the record owner before at least one unit has been sold and the taxes for each year constitute a blanket lien against the entire property.  In County of Los Angeles v. Hartford Acci. & Indem. Co., 3 Cal. App. 3d 809 (Cal. App. 2d Dist. 1970), it was held that only after the conveyance of at least one unit shall each condominium owned in fee be separately assessed.  However, if no units are sold, the entire condominium project shall continue to be assessed as a single parcel to a record owner, and the taxes for each year will continue to be blanket liens against the property.

However, there may be certain tax exemptions and abatements available to some condominium apartment owners such as for soldiers and veterans, aged persons and homesteads.

Inside Taxation Of Condominiums