Cost Condo: Condos usually cost more to buy than a co-op, but you have more flexibility with your investment. Co-op: While co-ops will have higher fees, the initial cost of buying into a co-op is usually cheaper than a condo. Property taxes Condo: Condos are individually owned, so owners are taxed separately just as they would be in a single-family home. Co-op: Co-ops are considered a single property, with a single property tax assessment that is split among the owners and usually included in the maintenance fee.
Property taxes are typically lower on co-ops than on condos. Co-op: Co-op residents can deduct their share of property taxes and mortgage interest. Disclaimer: The information included is designed for informational purposes only.
The buildings may not be shiny and new, but the layouts are larger and often have excellent floor plans. Most are low- or mid-rise and have a boutique feel. Finally, co-ops and co-ownerships tend to have stringent rules on renting out your unit, so there is a high percentage of owner-occupied units, and with that comes true pride of ownership among residents.
The catch? The turnover in these buildings is lower than their condominium counterparts. Also, there are a few pockets in Toronto that have several co-ops and co-ownerships, and other neighbourhoods without any, so you might have to leave your usual stomping grounds to get into one. Before purchasing either a condo or a co-op, make sure you are crystal-clear on the distinctions. For co-ops: In a co-op, you own shares in a corporation. For condos: When it comes to condos, you actually own a specific piece of real estate — your condo and the space within its four walls, plus a portion of the shared amenities.
In order to purchase shares, the co-op board has to approve you. This can take some time because the stakes are high. Co-op shareholders take on financial responsibility for the whole building. For these reasons, co-ops may also require more money upfront such as limiting the percent of the purchase price you can mortgage than condos.
For condos: Though you may still need to be approved by a board, condos are generally easier to secure than co-ops. In contrast, co-op shareholders take on responsibility for the entire building, so the board needs to be absolutely sure prospective buyers are financially secure. This often makes the approval process for co-ops longer.
The main difference in the buying process is that a co-op board has more at stake when considering who to let in, so prospective buyers will have to jump through a few more hoops than condo owners. When offered the choice, many movers choose co-ops for the cheaper sticker price. For co-ops: Beyond the cost of shares, co-op owners are required to pay a monthly co-op fee, called a maintenance fee. Property taxes for a co-op, also included in the monthly fee, are divided among all residents according to how many shares they have.
Finally, the monthly fee covers building operating costs, which usually includes amenity, utility, and other maintenance fees. A percentage of these fees, depending on how many shares you own, is tax-deductible. As a co-op shareholder, you technically have an interest in the upkeep of the entire building, and thus paying for that upkeep.
In certain circumstances, you could also be required to cover the cost of special assessments. Co-ops usually make up for low share prices with high monthly fees.
For condos: Condo owners also pay monthly fees, broken down a little differently from the co-op maintenance fee. Instead of splitting the cost of property taxes for the whole building, condo owners pay property taxes on their individual unit.
All management and financial decisions are made by the board, either through voting or by an elected board of directors that handles day-to-day operations. Curbed spoke with expert agents in both condo and co-op sales on how to determine which is best for you. This, of course, is the question that kicks off every homebuying process. You may have your heart set on low maintenance condo ownership, but working with a tight budget could change your mind. Co-op apartment are more plentiful in New York and typically in less demand than condos.
Both co-op and condo associations will charge monthly fees on top of your mortgage, which vary widely from building to building. Unlike a condo building, the co-op fee typically includes an underlying mortgage and property taxes, in addition to any amenity, maintenance and utility costs.
The more building amenities, the higher the fee. Co-op ownership is more suited for long-term ownership; consider it an investment in the building and the community of shareholders.
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