Last Updated on May 18, 2021 by Lamudi
Condominium properties are some of the hottest investments today, but with every property comes taxes and fees associated with it.
Q: What do condo fees cover?
A: Condo fees cover the expenses for managing everything outside an owner’s specific unit. These are otherwise known as association dues. They include expenses for:
- Salaries for the condominium staff
- Interior and exterior maintenance of the building
- Payment for licenses and taxes
Q: What are condo fees used for?
A: Condo fees are used to pay for the upkeep of the common areas. There is also an allotment for the exterior of the building.
The distribution is as follows:
- Upgrading and preserving amenities in usable condition
- Maintenance of the building premises
- Security and administration personnel
- Repairs and engineering
- Payment of licenses and taxes
Q: Do condo fees include insurance?
A: Yes, condo fees include insurance. They will only cover the exterior of the building and common areas. Such association dues will not include those units which are individually owned. The type of insurance will depend on the location of the building. This could include a combination of the following:
- Fire and lightning
- Explosion, falling debris, smoke and vehicle impact
- Sprinkler leakage
Q: Do condo owners pay property tax?
A: Yes, condo owners in the Philippines pay property tax otherwise known as real property tax. They do so based on the ownership of their individual units as well as their undivided share in the common areas of the building. Condo owners settle the real property tax on their individual unit directly to the local government unit having jurisdiction over it. It is the condominium corporation however which handles the real property tax of the common areas.
The funds to satisfy this obligation comes from the association dues. It is collected from all the unit owners according to the ratio of their individual ownership in the building.
Aside from the real property tax collected in the Philippines, the LGU may collect an annual tax rate of 1% on the assessed value of the property. This additional tax is for the purposes of the Special Education Fund.
Q: What if I missed my property tax payment?
If you missed a property tax payment, you should first see if the city where your property is located offers an amnesty for missed property tax payments. Always confirm that the local government unit (LGU) where your property is located offers amnesty so you can benefit from the suspension of fines and interest.
For example, on February 18, 2022, the Quezon City Council approved the ordinance SP-3096, officially known as the Real Property Tax Amnesty of 2022. This ordinance establishes a relief program for taxpayers who cannot pay the entire amount in cash and permits late payers to pay without incurring penalties. This discount, however, was only valid through June 30, 2022.
Read our previous journal on foreign ownership of property.