Fees/taxes on condos? (Boston: real estate, HOA fees, insurance)

[yinduffy]

My wife has us looking at moving to a condo in Northern Mass and I was wondering if there are any taxes or fees that will catch us off guard.
I know there would be condo fees for cutting grass and stuff but are there property or real estate taxes in Ma.? School taxes?
Is owning a condo cheaper than owning a house and paying full town property and school taxes?

[kingeorge]

You pay taxes just as any homeowner would. Higher or lower taxes will depend on the town you are buying in. There are no school taxes. Condo taxes can be lower but also higher depending on the appraisal and location.

Condo fees can be also very small, or very substantial depending on amenities, and what exactly they will cover. This is all on a case by case basis, and you should be checking each listing to understand the fees.

You can be caught off guard if you buy condo from someone who is owing great deal of money in fees, taxes, or for some special condo assessment. Or if special condo assessment needs to be implemented right after you move in. It is good to check condo documents before buying and most importantly understand financial health of the chosen condo community. You will be entering into arranged marriage with complete strangers, so be vigilant in your research.

This might help.

The Real Story Behind HOA Fees and Special Assessments - US News

[MikePRU]

Originally Posted by kingeorge

You pay taxes just as any homeowner would. Higher or lower taxes will depend on the town you are buying in. There are no school taxes. Condo taxes can be lower but also higher depending on the appraisal and location.

I just wanted to clarify George's statement because the wording he used is a little awkward and I don't want someone reading this to misunderstand. Condos are taxed at the exact same rate as single family homes. Real estate taxes are calculated using two factors: the local tax rate and the assessed value of the property. Being that condos are typically less valuable than the equivalent sized single family home you would pay less in taxes on a condo than you would a single family home. There's no guarantee of that though as there is not a ton of science behind the calculation of the tax assessment.

Originally Posted by kingeorge

Condo fees can be also very small, or very substantial depending on amenities, and what exactly they will cover. This is all on a case by case basis, and you should be checking each listing to understand the fees.

You can be caught off guard if you buy condo from someone who is owing great deal of money in fees, taxes, or for some special condo assessment. Or if special condo assessment needs to be implemented right after you move in. It is good to check condo documents before buying and most importantly understand financial health of the chosen condo community. You will be entering into arranged marriage with complete strangers, so be vigilant in your research.

As George mentions, when buying a condo you should do a full review of the documents which create/govern the association and the financial stability/health of the association. Your bank will want to review these documents as well since they will not want to lend in a financially unstable association.

[495neighbor]

Originally Posted by kingeorge

You pay taxes just as any homeowner would. Higher or lower taxes will depend on the town you are buying in. There are no school taxes. Condo taxes can be lower but also higher depending on the appraisal and location.

Condo fees can be also very small, or very substantial depending on amenities, and what exactly they will cover. This is all on a case by case basis, and you should be checking each listing to understand the fees.

You can be caught off guard if you buy condo from someone who is owing great deal of money in fees, taxes, or for some special condo assessment. Or if special condo assessment needs to be implemented right after you move in. It is good to check condo documents before buying and most importantly understand financial health of the chosen condo community. You will be entering into arranged marriage with complete strangers, so be vigilant in your research.

This might help.

The Real Story Behind HOA Fees and Special Assessments - US News

well said

[MikePRU]

One more thing I want to add about buying a condo . . . many home inspectors are lazy when inspecting a condo. They often will only inspect the actual unit itself. Make sure they inspect any common areas as well. For example, if the roof of the building is old you need to know that as you'll end up paying to replace it. The same thing goes for any shared heating/cooling system, pool, fitness facilities, etc, etc, etc.

[mmyk72]

Owning a condo is really not that different from a house, in terms of cost. Most people say to me things like.... great, you have no maintenance to worry about when you live in a condo.... That's absolutely false. If something needs fixing within your condo, it doesn't fix itself if the owner doesn't take care of it. Just today, I spent all afternoon sealing a drafty window... Don't know why people have that idea.

One small difference in insurance cost is having to buy a condo insurance (called H06) which covers the content (your personal belongings) and the fixtures (cabinets, countertop, HVAC unit, ,etc) if I remember correctly . This is on top of the Master Insurance which you also pay for that covers the structure and common areas included as part of the HOA fee typically.

The property tax depends on your town's assessment value. If you look at a new high end condo, it is easily valued higher than a small single familiy, in which case the condo will have a higher property tax.

[dtopaz]

The condo fees will cover some very different things depending on the type of condo you're talking about. If it's a single building that contains many units, there's a good chance that the condo fee includes heat and air conditioning. Other major expenses covered by condo fees are property management and the master insurance (but not, as mmyk72 notes, insurance for the contents of your condo).

Also keep in mind that while mortgage interest and property taxes are federal tax deductions, condo fees are not tax-deductible.

[495neighbor]

Originally Posted by mmyk72

if I remember correctly . This is on top of the Master Insurance which you also pay for that covers the structure and common areas included as part of the HOA fee typically.

The Master Insurance is included in the condominium fee.

[BostonMike7]

Also, Condo fees can go up. Depends on your building, management company, insurance, costs, etc.

I recently had mine jump from $275/mo to $330/mo due to a chance in insurance company to cover the building.

[MikePRU]

Originally Posted by BostonMike7

Also, Condo fees can go up. Depends on your building, management company, insurance, costs, etc.

I recently had mine jump from $275/mo to $330/mo due to a chance in insurance company to cover the building.

Good point! I would also add that when buying a new construction condo that the fee is often kept artificially low by the developer. Once the owners take over it goes up.