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- housing options
Depending on your local housing market, you may have a wide range of housing options to choose from. Each type of home has its own unique characteristics, and the type you choose will likely reflect your own personal needs and lifestyle.
Single-family home
The most traditional type of home purchase, a single-family home provides you with ownership of the house you are buying as well as the surrounding lot. A single-family home may provide you with the most privacy along with flexibility to change or sell the property as you wish. You are directly responsible for maintenance and all associated property taxes.
Condos
With a condo, you own all of the space within the four walls of your living area, but you don't own the surrounding building or land. In general, you must abide by the rules of the homeowner's association. However, you get the benefit of professional property management and aren't directly responsible for the maintenance and upkeep of the external property.
- You'll typically pay a monthly or annual fee to the homeowner's association.
- Your unit is assessed individually for property tax purposes and you are directly responsible for their payment.
- Fees paid to your association are not tax deductible, but any property taxes paid on your unit are.
Co-ops
With a co-op, or co-operative housing project, you own shares of a corporation that owns the building you live in. You don't technically own your apartment, but in effect are renting it from the corporation that owns the building. In general, you must abide by the rules of the co-op association.
- Like a condo, you typically enjoy the benefit of professional property management and aren't directly responsible for the maintenance and upkeep of the external property.
- You'll usually pay a monthly or annual maintenance fee to the corporation that is not tax-deductible. 1
- You are not taxed individually on your unit; rather, the corporation that owns your building is taxed as an entity and divides the tax bill according to your share of ownership in the corporation.
Planned unit developments
In a planned unit development, or PUD, you typically own the house that you live in as well as the surrounding lot, but you also own part of a common area that is shared with other residents and maintained through a homeowner's association fee. Fees paid to a homeowner's association are generally not tax deductible. 1
1. Consult your tax advisor regarding your specific situation.
