Condominium Financial Taxes

Condo Owners Question Developer’s Handling of Tax Bills

F.B. from Massachusetts writes:

Dear Mister Condo,

We moved into a newly built condo in MA last year. We have not received a town tax bill and the town said that the builder filed the master deed too late for the town to assess the individual properties. The town said that the bills will be ready next year. Is the builder liable for retroactive taxes or are the condo owners? Also, if the builder pays the town the taxes, can he try to collect the taxes from the home owners? We are concerned if the builder pays the taxes and we reimburse him then we will not get tax benefit.

Mister Condo replies:

F.B., congratulations to you and your fellow unit owners on your new condos. I am afraid that I am neither an expert is Massachusetts or your town’s tax code and rules so I am not the proper person to answer this question. As a newly formed condominium association, you should have an attorney representing the homeowners. This is separate from any attorney representing the developer. You need to ask this question of the association’s attorney and/or accountant who should be familiar with your local tax code and practices. You make a valid point about who you are paying taxes to. If you pay the municipality directly, you can show where you paid real estate taxes which can be itemized and claimed on your own tax return whereas a payment to the developer might not satisfy the requirement for using the tax payment as a personalized deduction. I have no idea about the builder’s liability because it would really depend who the owner of the property was when the tax burden was incurred. You should really get some local expert advice to answer these questions. Good luck!

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