A frequently asked question by our landowner clients is: "why are so many apartment owners converting their apartment buildings to condominiums with no intention of selling units or operating as a condominium corporation?". The answer is simple. Despite the risks and barriers, many apartment owners feel that upon conversion they are left with many benefits including:
1. Tax Savings
•· Depending on the jurisdiction, apartment owners could achieve up to a 40% property tax reduction
•· Upon the change in legal title from freehold to condominium ownership, the property is assessed as single family dwelling units rather than the higher taxed multi-residential building
2. Flexibility
•· In addition to selling the entire building, apartment owners will have the ability to sell the building unit by unit to individual investors or owner occupants
•· Ability to finance individual units
3. Even Playing Field
•· Addresses the tax inequity between owners of condominium and non-condominium titled rental buildings that are otherwise physically identical
4. Added Value
•· Reduced realty taxes result in increased net operating income, thereby increasing market value for condominium titled properties
5. Equity Retrieval
•· Added value means that an owner can increase the amount borrowed against the property
For more information, please contact Becky Griffiths, Michael Lake, Holden Rhodes, Sandra Van Ymeren, or any other member of the McKenzie Lake Real Estate Team.
This blog post is provided for educational purposes only. It is not intended to be advertising, and it is not intended to be and should not be relied upon as a source of legal advice. You should not rely upon the content without first seeking the advice of legal counsel. The author of this blog post and her employer, Mckenzie Lake Lawyers LLP, expressly disclaims all liability in respect to actions taken, or not taken, based upon the content of this blog post.
