What is the difference between a condo and a coop?
Condos and coops are the two most common types of real estate in NYC. Condos are similar to house purchases because the buyer will receive a deed at closing and will pay his/her own tax bill. With a condo purchase, a buyer is buying the physical space of the apartment as well as a percentage of the common elements of the condominium building. Common elements include hallways, driveways, gyms, and lounges. After closing, condo owners pay a monthly common charge that covers the maintenance of the common elements of the building, and real estate taxes. The real estate portion of the maintenance is deductible from your taxable income.
A coop is a different form of home ownership where a buyer becomes a shareholder of a corporation (the coop building). Each apartment represents a certain number of shares that reflect the size of the apartment. Instead of a deed, a buyer would receive a stock certificate and a proprietary lease, which gives the buyer the right to live in the apartment. After closing, coop owners pay a monthly maintenance to the corporation which is the owner’s proportionate share of the building’s operating expenses (heat, hot water, insurance, any mortgage payments, staff salaries, and real estate taxes, for example). A portion of the maintenance is deductible from your taxable income.