Can I deduct HOA fees?

If your property is used for rental purposes, the IRS considers HOA fees tax deductible as a rental expense. If you purchase property as your primary residence and you are required to pay monthly, quarterly or yearly HOA fees, you cannot deduct the HOA fees from your taxes.

Are POA dues tax deductible?

These fees are used to fund the association’s maintenance and operations. Those who live within an HOA community, though, often wonder, “Are HOA dues tax deductible?” The short answer is no. If you use the property as your primary residence, then your HOA fees are not deductible.

How can I lower my HOA fees on my condo?

How to Lower Your HOA Fees

1. Reduce reserve funds. If the reserve fund has enough cash, suggest using some of those funds to cover necessary projects.
2. Defer nonessential repairs. Talk to the board about deferring non-essential projects to avoid hiking HOA fees.
3. Check contracts with vendors.

Are HOA dues worth it?

Retirees often find the most value in HOAs because they are at a point in life where they don’t want to – or even struggle to – do the sort of routine maintenance that is often taken care of by an HOA. HOA fees can also be worth it if they maintain your home’s value.

Is there a limit to an increase in condo association dues or fees?

To mirror what Mark said…our by-laws limit HOA fee increases to 15%. Anything over that requires a vote by the community. (We’re also in Illinois.)

Are there association dues that are subject to tax?

Are association dues subject to tax? Yes. Earlier this year, the Bureau of Internal Revenue released Revenue Memorandum Circular No. 9-2013 which states that association dues and other fees collected by the homeowner’s association are now subject to Value-Added Tax (VAT).

What was the Supreme Court decision on condo dues?

In a 33-page decision, the SC 1st Division nullified a Bureau of Internal Revenue (BIR) circular in 2012 which would have imposed 12% value-added tax (VAT) and 32% income tax on association dues, membership, and other fees charged by condominium operators to tenants.

Why are condo dues collected in the first place?

“To repeat, they (dues) are collected purely for the benefit of the condominium owners and are the incidental consequence of a condominium corporation’s responsibility to effectively oversee, maintain, or even improve the common areas of the condominium, as well as its governance,” the ruling said.