Cooperative ownership is characterized by a shared ownership structure where residents do not own their individual units outright. Instead, they own shares in a corporation that owns the entire property, which grants them occupancy rights to a specific unit. This form of ownership necessitates that all shareholders collectively pay the property taxes for the entire building or complex, as these taxes are based on the overall value of the property rather than individual units.
In a cooperative, the financial responsibilities, including property taxes, are often handled through monthly fees paid by residents. Since these fees cover common expenses, including property taxes, it creates a situation where all co-op members contribute to the tax liability, reflecting the cooperative's shared financial structure.
Other types of ownership, such as condominium, time share, and townhouse ownership, operate under different financial models. For instance, condominium ownership allows individuals to own their units outright and pay taxes directly on their property, time shares typically involve partial ownership of a property for certain time periods, and townhouse ownership usually includes both ownership of the individual structure and a share of the common areas, with property taxes assessed separately for each unit.