How do co-op owners deduct real estate taxes?

Why co-ops are different

If you own a cooperative apartment, you do not own real property in your own name. Publication 530 explains that you own shares of stock in a corporation that owns or leases housing facilities. The corporation pays the real estate taxes, usually passes the cost to shareholders through monthly maintenance charges, and you generally receive the same tax treatment as other homeowners. The publication gives co-op owners their own set of rules because the tax is the corporation’s, not yours.

The four conditions

You can deduct your share of the corporation’s deductible real estate taxes only if the cooperative housing corporation meets all of the following. First, the corporation has only one class of stock outstanding. Second, each stockholder, solely because of ownership of the stock, can live in a house, apartment, or house trailer owned or leased by the corporation. Third, no stockholder can receive any distribution out of capital, except on a partial or complete liquidation of the corporation. Fourth, at least one of three tests is met: at least 80% of the corporation’s gross income for the tax year was paid by the tenant-stockholders; at least 80% of the total square footage of the corporation’s property must be available for use by the tenant-stockholders during the entire tax year; or at least 90% of the expenditures paid or incurred by the corporation were used for the acquisition, construction, management, maintenance or care of the corporation’s property for the benefit of the tenant-shareholders during the entire tax year. Your board or managing agent can usually tell you whether the building meets them.

Your share, step by step

The publication gives a two-step formula. Divide the number of your shares by the total number of shares outstanding, including any shares held by the corporation. Multiply the corporation’s deductible real estate taxes by that number. The result is your share of the real estate taxes. Generally, the corporation will tell you your share, and that is the amount you can deduct if it reasonably reflects the cost of real estate taxes for your dwelling unit. Many co-ops send an annual statement for this purpose.

An illustration with invented numbers: you own 250 of 10,000 shares outstanding (2.5%), and the corporation’s deductible real estate taxes for the year are $480,000. Your share is $480,000 x 250 / 10,000 = $12,000. If the corporation’s statement says $12,000 and reflects your unit, deduct $12,000 on Schedule A, subject to the overall limit on state and local taxes. The calculator above does the same division.

Tenant-stockholders can be more than people

The publication says a tenant-stockholder can be any entity, such as a company or corporation, trust, estate, partnership or association, as well as an individual. The tenant-stockholder does not have to live in any of the cooperative’s units, and the units they have the right to occupy can be rented to others. So an investor who owns shares tied to a unit that is rented out can still be a tenant-stockholder for this rule.

Refunds and what is not deductible

If the corporation receives a refund of real estate taxes it paid in an earlier year, it must reduce the amount of real estate taxes paid this year when it allocates the tax expense to you, and your deduction is reduced by your share of the refund. Publication 530’s general exclusions describe what is not a deductible real estate tax: itemized charges for services, assessments for local benefits that increase value, and transfer taxes. Insurance and utilities are on its list of nondeductible payments, so the part of a monthly maintenance payment that covers them is not deductible. See homeowners insurance for the insurance point.

Mortgage interest and the other parts of the rule

The same conditions open a second door. If you took out a loan to buy stock in a cooperative housing corporation, Publication 530 says you can usually treat that interest as home mortgage interest, and you can treat your share of the corporation’s deductible mortgage interest the same way, figured with the same share method. We do not cover interest here because it follows the Publication 936 rules; the deduction is subject to its own limits. Basis for a co-op is the amount you paid for the shares, including purchase commissions or other costs of acquiring them: see the cost basis of a home.

Putting it together

Get the corporation’s annual tax statement, confirm the building meets the conditions, and check that the number reflects your unit. Combine it with any other state and local taxes you pay before applying the overall limit, which Publication 530 reports as $40,000 for 2025 ($20,000 if married filing separately). If you are comparing deductions, run the standard vs itemized deduction calculator and read are real estate taxes deductible.

Sources

• IRS Publication 530, Tax Information for Homeowners (2025): the “Special Rules for Cooperatives” section and the “Cooperative apartment” entry. Read November 2, 2026.

Edition read: Publication 530 (2025), for use in preparing 2025 returns. Dollar limits, credits and rates in the publication are for 2025 and can change; check the current publication and the Schedule A instructions for your tax year. This page summarizes the publications and does not replace them. Marked for human review.