Condominium Renovation 2025: FAQs from the IRS
To address questions about condo renovations, the IRS has released answers to common inquiries. The details cover various topics, such as restrictions on expense reporting and ensuring amounts are consistently reported. The updates mainly focus on guidelines for administrators' duties and communication responsibilities.
Reporting Deadlines
By March 16 each year, condominium administrators must report to the Tax Registry the costs incurred the previous year for measures to restore the building's historical heritage, energy upgrades, and the purchase of furniture and large appliances for shared areas of the property under renovation.
Some Clarifications
In response to a frequently asked question about communication costs regarding condo construction, the Tax Administration stated that the administrator is not required to send a notice if all condo owners have opted for a credit transfer or discount on the due amount instead of using the deduction directly for all work done in shared areas. This exception is part of the regulation dated February 21, 2024.
For small condominiums, the Tax Administration clarified that "if an administrator is appointed in a condo with fewer than eight members (according to Article 1129 of the Civil Code, appointing an administrator is only mandatory if there are more than eight members), the administrator must report data on common area restructuring and energy-saving measures by March 16 of the following year. However, if a 'minimum condo' does not have an appointed administrator, the owners are not required to report the measures to the Tax Registry."
Regarding large condominiums, the IRS indicated that it will offer software to compile and monitor data on renovation and energy-saving measures.
Methods of Reporting
If the large condominium has completed all payments related to renovation and energy-saving measures, it will send a single report to the Tax Agency with details of the actions and expenses incurred for all condo owners. However, if the large condo has paid for renovations in shared areas and individual condos have also covered their expenses, each entity (large condo and individual condo) will send separate reports to the Tax Agency.
The Tax Administration added that for reporting data on events held in the condo's shared areas, it will provide suitable software for compiling and checking.
