Life – a user's manual Part II - Boksidan

In the case of condominiums, the situation is a bit special. In that way that often both the association and the
individual members has loans on the house. There are several reasons for this, mainly:
- They choosed to put some of the cost for the purchase of the property on the condominium associations so
that it would not seem too expensive to become a member.
- The association has taken loans to finance a renovations because they received interest subsidies from the
goverment for this.
But the thing that speaks against this is that the individual members have a reduction on their income tax for
interest on loans that are their own, which they can not get on the association's loans. Therefore some
condominium associations who have loans now choose to shift the loan to the members and then reduce the
fee accordingly. Which might be worth thinking about for associations with large loans and no assets (i.e.
rental units) that can be sold in the future and create capital to solve the loans. One benefit in addition to the
direct economic effect is that it can increase the value of the condominiums. Another advantage is that the
members under certain circumstances can deduct capital when calculating the tax when they sell their
condominium.
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