Are condo fees tax deductible? What to know

This article is for general informational purposes only and does not constitute legal advice. Laws, regulations, and CRA guidelines frequently change and may be subject to provincial variations. Owners and council members should consult qualified legal counsel and work closely with their condominium management company for advice specific to their Ontario condo corporation.
 

What are condo fees?

Condo fees, also known as maintenance fees, are recurring payments made by unit owners to cover the cost of operating and maintaining the condominium corporation. When you purchase a condominium, you don’t just own a single unit — you also share responsibility for maintaining and running the condominium’s common areas. These essential shared spaces can include lobbies, hallways, parking garages, outdoor spaces, and any on-site amenities like fitness centres or recreational rooms. Condo fees are essential for keeping common areas in good condition and funding services so that the condo remains a desirable place to live.

In most cases, the condominium’s board of directors (often with guidance from a condominium management company) determines the monthly fee by preparing and approving an annual budget. Each owner's condo fees are calculated based on their unit's percentage share of the total condominium expenses, using factors such as unit size, location, and shared facility usage.
 

Are condo fees tax deductible?

If the condo is your primary residence, condo fees are usually not tax deductible. The Canada Revenue Agency (CRA) views these fees as a personal expense, similar to mortgage payments or rent, meaning they typically can’t be claimed on a personal tax return.

However, if you rent out your condo, you may be able to deduct a portion of your condo fees as part of your expenses. The CRA allows landlords to claim eligible costs related to maintaining and managing a rental property, including:

• Mortgage interest
   
• Property taxes
   
• Repairs and maintenance
   
• Condo fees (related to upkeep and maintenance of the unit)

Keeping detailed records — including receipts and financial statements — is key to demonstrating that your unit is generating income. Working with a condominium management company can help keep these records organized. In some cases, a portion of your condo fees may go toward capital improvements, which could be treated differently for tax purposes.

If you use part of your condo as a home office or short-term rental, you may be able to deduct a portion of your condo fees based on the percentage of the space used for business or rental purposes. Tax rules around partial deductions can be complex, so it’s essential to work with a qualified tax professional who understands Canadian real estate laws and regulations.
 

What is a special assessment?

A special assessment is a one-time (or occasionally incremental) fee charged to unit owners when the condominium corporation needs to fund a specific, significant project or repair that isn’t covered by the reserve fund. Examples might include extensive structural repairs, a major roof replacement, or a substantial renovation to common amenities.
 

Can you write off condo special assessments?

If your condo is your primary residence, special assessments typically can’t be claimed as a tax deduction. The CRA views these costs much like home renovations — they’re considered an investment in maintaining or improving your condominium rather than an immediate expense. While they may enhance your condo’s long-term value, they generally don’t qualify as deductible on a personal tax return.

If your condo is a rental property, special assessments may be tax deductible, depending on how the funds are used. If the assessment covers routine upkeep or repairs that maintain the property's existing condition, it may qualify as a current expense and be fully deductible. However, if it funds major upgrades or long-term improvements like a new roof or elevator system, it may be considered a capital expense, which is treated differently for tax purposes.

Distinguishing between current and capital expenses can be complex, and CRA guidelines play a key role in determining what qualifies. Working with a tax professional can help you navigate these rules and make the most of your eligible deductions. A knowledgeable condominium management company can also provide guidance to help plan for these expenses.
 

Other condo-related expenses that may be deductible

If you rent out your condo unit, there are other tax-deductible expenses that may help reduce your taxable income:

• Capital Cost Allowance: The CRA allows some rental condo owners to claim Capital Cost Allowance (CCA), which is essentially depreciation on the building portion of your condo (but not the land). This means that over time, you can deduct a portion of the property's cost to account for wear and tear. However, claiming CCA reduces your property’s adjusted cost base, which can increase your taxable capital gain when you sell the unit.
   
• Condo management fees: If your condo corporation works with a professional condominium management company like FirstService Residential, you may be able to deduct the portion of your condo fees that goes toward building management.
   
• Advertising costs: Any expenses related to listing and marketing your rental unit may be deductible.
   
• Utilities: If you cover heat, electricity, water, or other utilities for your renters, those costs may be deductible.
   
• Insurance: Condo insurance premiums for rental units may be deductible.
   
• Repairs and maintenance: Keeping the unit in good condition is a necessary business expense and may be deductible in the year the work is completed.

Maintaining detailed financial records is key to maximizing your deductions and simplifying tax season. As always, tax laws and CRA interpretations can change and can vary depending on individual circumstances. Always consult a qualified accountant or tax professional, along with your condominium management company, before deducting expenses.
 

Interested in financial and accounting services for your Ontario community?

FirstService Residential offers comprehensive financial and accounting services tailored to Ontario condominium corporations and owners. From monthly financial reporting and budget planning to transparent expense tracking and audit preparation, our team can help your condo operate efficiently while remaining financially secure.

For more information on how FirstService Residential’s value-added financial and accounting services can support your condominium’s financial health, contact our team today.