Are Your HOA Fees Hiding a Tax Break?

Most homeowners cannot deduct HOA fees on their taxes if the property is their primary residence. However, deductions may be possible if the home is used for business purposes—such as a dedicated home office for self-employed individuals—or if the property is rented out, where HOA dues can be treated as a rental expense. In cases where only part of the home is used for business or rental purposes, the deduction must be prorated based on square footage or time rented. Additionally, special HOA assessments for repairs may be deductible, while those used for improvements may increase the home’s cost basis and potentially reduce capital gains taxes when the property is sold.

Read More: Realtor.com

HOA fees are becoming more common — and costly

More homes for sale in 2024 came with homeowners association (HOA) fees, and those dues increased from 2023, according to a Realtor.com report. HOA fees, which cover maintenance and amenities, can be a financial hurdle for buyers in an already expensive market. Nationwide, 40.5% of homes listed had HOA dues, with the median monthly fee rising from $110 to $125. Experts advise buyers to check an HOA’s reserve funds to avoid unexpected fee hikes, and those looking to avoid HOA fees may have better luck in Charleston, South Carolina.

Source: Axios

HOA, condo association group weighs in on foreclosures over unpaid assessments, fines

Recent headlines have highlighted controversial HOA and condo association foreclosures, prompting legislative action in several states to impose stricter foreclosure procedures. In response, the Community Association Institute (CAI) updated its foreclosure policy, emphasizing fairness, reasonable payment plans, and foreclosure as a last resort. The policy ensures homeowners have opportunities to resolve delinquencies while preserving associations' ability to collect dues and secure financing. These changes aim to balance homeowner protections with the financial stability of community associations.

Source: MSN

Florida condo owners face hefty fees under new structural reserve laws

A new Florida law requires condo associations to maintain reserve funds for structural repairs, leading to hefty assessment fees for residents, including a $21 million charge at 1060 Brickell. Some owners argue the repairs are not urgent, but the law was enacted after the Champlain Towers collapse to prioritize safety. A hearing is set for January 24 as residents seek to delay or reduce costs, while concerns grow over affordability and the financial strain on homeowners.

Source: CBSNews