What is a Homeowners / Condo Association (HOA)?

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What is a homeowner or condo association to the Internal Revenue Service? A homeowner or condo association is a type of membership organization that you form as a real estate developer. The idea is to create an organization so that you can have common areas to protect certain pieces of property. You may have condos you are selling, but you want to protect common green areas, streets, as well as things such as the sidewalks.

The goal of the association is to help to preserve the developmentā€™s appearance overall. It has the design and operation to be such that it will benefit all residents of the community it is a part of. There is a social welfare organization exemption that the homeowners or condo association can qualify for to the Internal Revenue Service. The exemption can provide tax benefits in exchange for the upkeep of the common areas.

All Homeowners / Condo Associations (HOA) will need to apply for a Tax ID Number as part of it’s initial requirements from the IRS. The easiest way to obtain a Tax ID for a Homeowners Association is to apply using the online Non-Profit Tax ID Application and select “HOA” from the drop-down menu. This will ensure that you obtain the appropriate Tax ID.