Frequently Asked Questions
Are co-ops cheaper than condos?
Often. Co-ops typically have lower purchase prices than comparable condos because they restrict investors and subletting and require stricter financials. The trade-off is less flexibility and tighter board approval.
Do condos have maintenance fees?
Yes. In a condo, monthly fees are called common charges, which cover building expenses and services. Owners also pay property taxes separately.
Do co-ops pay property taxes?
Yes. The co-op building pays property tax for the entire property, and each shareholder pays their share through monthly maintenance, which also covers building operating costs and sometimes utilities.
Are there closing costs in co-ops?
Yes. All NYC purchases have closing costs. Co-op buyers often see lower closing costs than condo buyers, but there are still attorney fees, lender fees, and building charges.
What are typical condo closing costs?
For buyers, condo closing costs are often roughly 2–6% of the purchase price, and can be higher for new developments because of additional taxes and fees. Exact numbers depend on the purchase price, financing, and building requirements.
Are monthly fees tax-deductible in co-ops?
Often, a portion related to underlying mortgage interest and real estate taxes may be deductible, but you must confirm with your accountant.
Are condo common charges tax-deductible?
Common charges themselves are usually not deductible, but property taxes may be. Always confirm with your tax advisor.
Do co-ops have underlying mortgages?
Many do, and these loans are serviced through your monthly maintenance. Large underlying mortgages can affect maintenance levels and building health.
What is an assessment?
An assessment is a temporary extra charge on owners' monthly fees to cover specific building expenses or capital projects.
Can you appeal property taxes for condos?
Yes. Owners can pursue tax grievances or appeals through NYC's tax process or with specialized firms.
What happens if you default on co-op maintenance?
The co-op can evict you and sell your shares to recover unpaid amounts.
What happens if you default on condo common charges?
The condo board can place a lien on your unit and, in extreme cases, pursue foreclosure on the apartment.
Yes. Co-op financials are generally audited annually, and buyers should review the latest audited statements.
Do co-ops get audited?
Are there tax benefits to buying in NYC?
There may be, including potential mortgage interest and property tax deductions, but this is highly specific—always review with your accountant.
Are mansion taxes the same for co-ops and condos?
Yes. Mansion tax applies to both condos and co-ops on purchases at or above $1M, with rates increasing at higher price points.
FINANCING & QUALIFICATIONS
Is financing different for condos vs. co-ops?
The loans feel similar, but structurally differ. Condo loans are secured by a mortgage on real property; co-op loans are secured by your shares and proprietary lease and documented with a UCC-1 filing.
What's a debt-to-income ratio (DTI)?
DTI is the percentage of your gross monthly income that goes toward monthly debt payments. Many NYC co-ops want to see a DTI no higher than roughly 25–30%, while condos usually follow lender guidelines.
What is post-closing liquidity?
Post-closing liquidity is money left over after you buy—cash, stocks, or other liquid assets. Many NYC co-ops require 12–24 months of maintenance and mortgage payments in liquid reserves after closing.
What's the minimum down payment for co-ops?
Many co-ops require at least 20–25% down, and some demand 50% or even all-cash. A smaller number allow lower down payments.
Yes. Most condos can be financed with as little as 10–20% down, depending on the building and loan product.
Can you finance a condo?
Yes. All-cash offers are common in NYC and can strengthen your negotiating position.
Can you buy a condo with cash?
Yes. Both co-op loans and condo mortgages can typically be refinanced if you qualify and the building meets lender guidelines.
Sometimes, but many co-ops restrict pure investors and prefer primary residences or pied-à-terre use. Investors usually focus on condos or townhouses.
Can you get an investment loan for a co-op?
Can I refinance a condo mortgage?
Often yes, but only up to certain limits and subject to IRS and local rules—confirm with your accountant.