---
kind: "section"
citation: "26 U.S.C. § 528"
title: "26"
title_heading: "Internal Revenue Code"
number: "528"
heading: "Certain homeowners associations"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/528"
units:
  - "Subtitle A — Income Taxes"
  - "Chapter 1 — Normal Taxes and Surtaxes"
  - "Subchapter F — Exempt Organizations"
  - "Part VII — Certain Homeowners Associations"
---

# §528. Certain homeowners associations

- (a) **General rule—** A homeowners association (as defined in [subsection (c)](#c)) shall be subject to taxation under this subtitle only to the extent provided in this section. A homeowners association shall be considered an [organization](/usc/26/414.md?p=m-6-A) exempt from income taxes for the purpose of any law which refers to [organizations](/usc/26/414.md?p=m-6-A) exempt from income taxes.
- (b) **Tax imposed—** A tax is hereby imposed for each taxable year on the homeowners association [taxable income](/usc/26/63.md?p=a) of every homeowners association. Such tax shall be equal to 30 percent of the homeowners association [taxable income](/usc/26/63.md?p=a) (32 percent of such income in the case of a timeshare association).
- (c) **Homeowners association defined—** For purposes of this section—
  - (1) **Homeowners association—** The term “homeowners association” means an [organization](/usc/26/414.md?p=m-6-A) which is a condominium management association, a residential real [estate](/usc/26/1361.md?p=c-3) management association, or a timeshare association if—
    - (A) such [organization](/usc/26/414.md?p=m-6-A) is organized and operated to provide for the acquisition, construction, management, maintenance, and care of association [property](/usc/26/317.md?p=a),
    - (B) 60 percent or more of the gross income of such [organization](/usc/26/414.md?p=m-6-A) for the taxable year consists solely of amounts received as membership dues, fees, or assessments from—
      - (i) owners of residential units in the case of a condominium management association,
      - (ii) owners of residences or residential lots in the case of a residential real [estate](/usc/26/1361.md?p=c-3) management association, or
      - (iii) owners of timeshare rights to use, or timeshare ownership [interests](/usc/26/856.md?p=f-1) in, association [property](/usc/26/317.md?p=a) in the case of a timeshare association,
    - (C) 90 percent or more of the expenditures of the [organization](/usc/26/414.md?p=m-6-A) for the taxable year are expenditures for the acquisition, construction, management, maintenance, and care of association [property](/usc/26/317.md?p=a) and, in the case of a timeshare association, for activities provided to or on behalf of members of the association,
    - (D) no part of the net earnings of such [organization](/usc/26/414.md?p=m-6-A) inures (other than by acquiring, constructing, or providing management, maintenance, and care of association [property](/usc/26/317.md?p=a), and other than by a rebate of excess membership dues, fees, or assessments) to the benefit of any private shareholder or individual, and
    - (E) such [organization](/usc/26/414.md?p=m-6-A) elects (at such time and in such manner as the Secretary by regulations prescribes) to have this section apply for the taxable year.
  - (2) **Condominium management association—** The term “condominium management association” means any [organization](/usc/26/414.md?p=m-6-A) meeting the requirement of [subparagraph (A)](#c-1-A) of paragraph (1) with respect to a condominium proj­ect substantially all of the units of which are used by individuals for residences.
  - (3) **Residential real estate management association—** The term “residential real [estate](/usc/26/1361.md?p=c-3) management association” means any [organization](/usc/26/414.md?p=m-6-A) meeting the requirements of [subparagraph (A)](#c-1-A) of paragraph (1) with respect to a subdivision, development, or similar area substantially all the lots or buildings of which may only be used by individuals for residences.
  - (4) **Timeshare association—** The term “timeshare association” means any [organization](/usc/26/414.md?p=m-6-A) (other than a condominium management association) meeting the requirement of [subparagraph (A)](#c-1-A) of paragraph (1) if any member thereof holds a timeshare right to use, or a timeshare ownership [interest](/usc/26/856.md?p=f-1) in, real [property](/usc/26/317.md?p=a) constituting association [property](/usc/26/317.md?p=a).
  - (5) **Association property—** The term “association [property](/usc/26/317.md?p=a)” means—
    - (A) [property](/usc/26/317.md?p=a) held by the [organization](/usc/26/414.md?p=m-6-A),
    - (B) [property](/usc/26/317.md?p=a) commonly held by the members of the [organization](/usc/26/414.md?p=m-6-A),
    - (C) [property](/usc/26/317.md?p=a) within the [organization](/usc/26/414.md?p=m-6-A) privately held by the members of the [organization](/usc/26/414.md?p=m-6-A), and
    - (D) [property](/usc/26/317.md?p=a) owned by a [governmental unit](/usc/26/150.md?p=a-2) and used for the benefit of residents of such unit.

    In the case of a timeshare association, such term includes [property](/usc/26/317.md?p=a) in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use [property](/usc/26/317.md?p=a) related to the timeshare project.

- (d) **Homeowners association taxable income defined—**
  - (1) **Taxable income defined—** For purposes of this section, the homeowners association [taxable income](/usc/26/63.md?p=a) of any [organization](/usc/26/414.md?p=m-6-A) for any taxable year is an amount equal to the excess (if any) of—
    - (A) the gross income for the taxable year (excluding any exempt function income), over
    - (B) the deductions allowed by this chapter which are directly connected with the production of the gross income (excluding exempt function income), computed with the [modifications](/usc/26/424.md?p=h-3) provided in [paragraph (2)](#d-2).
  - (2) **Modifications—** For purposes of this subsection—
    - (A) there shall be allowed a specific deduction of $100,
    - (B) no net operating loss deduction shall be allowed under [section 172](/usc/26/172.md), and
    - (C) no deduction shall be allowed under part VIII of subchapter B (relating to special deductions for corporations).
  - (3) **Exempt function income—** For purposes of this subsection, the term “exempt function income” means any amount received as membership dues, fees, or assessments from—
    - (A) owners of condominium housing units in the case of a condominium management association,
    - (B) owners of real [property](/usc/26/317.md?p=a) in the case of a residential real [estate](/usc/26/1361.md?p=c-3) management association, or
    - (C) owners of timeshare rights to use, or timeshare ownership [interests](/usc/26/856.md?p=f-1) in, real [property](/usc/26/317.md?p=a) in the case of a timeshare association.

## Source credit

(Added Pub. L. 94–455, title XXI, § 2101(a), Oct. 4, 1976, 90 Stat. 1897; amended Pub. L. 95–600, title III, § 301(b)(7), title IV, § 403(c)(2), title VII, § 701(n)(1), Nov. 6, 1978, 92 Stat. 2821, 2868, 2907; Pub. L. 96–605, title I, § 105(a), Dec. 28, 1980, 94 Stat. 3523; Pub. L. 105–34, title IX, § 966(a)–(d), Aug. 5, 1997, 111 Stat. 894, 895.)

## Notes

### Editorial Notes

### Amendments

1997—Subsec. (b). Pub. L. 105–34, § 966(d), which directed amendment of subsec. (b) by inserting before the period “(32 percent of such income in the case of a timeshare association)”, was executed by making the insertion before the period at end to reflect the probable intent of Congress.

Subsec. (c)(1). Pub. L. 105–34, § 966(a)(1)(A), substituted “, a residential real estate management association, or a timeshare association” for “or a residential real estate management association” in introductory provisions.

Subsec. (c)(1)(B)(iii). Pub. L. 105–34, § 966(a)(1)(B), added cl. (iii).

Subsec. (c)(1)(C). Pub. L. 105–34, § 966(a)(1)(C), inserted before comma at end “and, in the case of a timeshare association, for activities provided to or on behalf of members of the association”.

Subsec. (c)(4). Pub. L. 105–34, § 966(a)(2), added par. (4). Former par. (4) redesignated (5).

Subsec. (c)(5). Pub. L. 105–34, § 966(c), inserted concluding provisions “In the case of a timeshare association, such term includes property in which the timeshare association, or members of the association, have rights arising out of recorded easements, covenants, or other recorded instruments to use property related to the timeshare project.”

Pub. L. 105–34, § 966(a)(2), redesignated par. (4) as (5).

Subsec. (d)(3)(C). Pub. L. 105–34, § 966(b), added subpar. (C).

1980—Subsec. (b). Pub. L. 96–605 substituted provision that all income of a homeowners association be taxed at a rate of 30 per cent for provision that all income of a homeowners association be taxed a sum computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b) of this title and struck out provision providing for alternative tax in case of capital gains.

1978—Subsec. (b)(1). Pub. L. 95–600, § 301(b)(7), substituted “Such tax shall be computed by multiplying the homeowners association taxable income by the highest rate of tax specified in section 11(b)” for “Such tax shall consist of a normal tax and a surtax computed as provided in section 11 as though the homeowners association were a corporation and as though the homeowners association taxable income were the taxable income referred to in section 11” and struck out provision that for purposes of this subsection, the surtax exemption provided by section 11(d) not be allowed.

Subsec. (b)(2)(B). Pub. L. 95–600, § 403(c)(2), substituted provision related to amount being determined according to section 1201(a) for provision requiring an amount of 30 percent.

Subsec. (c)(2). Pub. L. 95–600, § 701(n)(1), substituted “by individuals for residences” for “as residences”.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1997 Amendment

Pub. L. 105–34, title IX, § 966(e), Aug. 5, 1997, 111 Stat. 895, provided that: “The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1996.”

### Effective Date of 1980 Amendment

Pub. L. 96–605, title I, § 105(b), Dec. 28, 1980, 94 Stat. 3523, provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1980.”

### Effective Date of 1978 Amendment

Amendment by section 301(b)(7) of Pub. L. 95–600 applicable to taxable years beginning after Dec. 31, 1978, see section 301(c) of Pub. L. 95–600, set out as a note under section 11 of this title.

Pub. L. 95–600, title IV, § 403(d)(3), Nov. 6, 1978, 92 Stat. 2869, provided that: “The amendments made by paragraphs (2), (3), and (4) of subsection (c) [amending this section and sections 857 and 904 of this title] shall take effect on the date of the enactment of this Act [Nov. 6, 1978].”

Pub. L. 95–600, title VII, § 701(n)(2), Nov. 6, 1978, 92 Stat. 2907, provided that: “The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after December 31, 1973.”

### Effective Date

Pub. L. 94–455, title XXI, § 2101(e), Oct. 4, 1976, 90 Stat. 1899, provided that: “Except as provided in subsection (f)(2) [set out as a note under section 216 of this title], the amendments made by this section [enacting this section and amending sections 216 and 6012 of this title] shall apply to taxable years beginning after December 31, 1973.”