Special Assessment Accounting for Quebec Co-ownerships

Update note (current as of 2026-07-16). In a divided co-ownership in Quebec, a special assessment helps finance unforeseen or major expenses that exceed the current budget. Properly recording these amounts under ASPE (NCECF) and understanding the tax implications helps prevent disputes with co-owners and year-end adjustments.

Special assessment: when and why to use one

A special assessment is an additional assessment on top of regular common expenses. The board of directors (board) proposes one when:

• major work is required and the contingency fund is insufficient;
• an insured loss results in an insurance deductible or uninsured work;
• an annual general meeting approves a particular unbudgeted project (e.g., a shared electric vehicle charging station or intercom upgrade);
• urgent spending is required for the safety of the common portions.

Unlike recurring common expenses, a special assessment is one-time and is often linked to a specific project. It must comply with the declaration of co-ownership (DCV) and the rules of the Civil Code of Quebec concerning allocation based on the relative value of the fractions.

For governance purposes, document the board or annual general meeting resolution, the project’s detailed budget, the collection schedule and the written communication to co-owners (and keep everything with the minutes).

Key legal references in Quebec

The Civil Code of Quebec governs co-owner contributions and work planning:

• Contribution to common expenses: each co-owner contributes according to the relative value of their fraction (reference: Civil Code of Quebec, s. 1064).
• Contingency fund: the syndicate must establish and maintain a fund for major repairs and the replacement of common portions (reference: Civil Code of Quebec, ss. 1071–1072).
• Maintenance logbook / contingency fund study (EUC): work planning is based in part on the maintenance logbook and contingency fund study required by law (recent references in the Civil Code of Quebec and Bill 16).

To consult the legislation, see the Civil Code of Quebec on LégisQuébec:

• https://www.legisquebec.gouv.qc.ca/fr/document/ccq-1991

RGCQ also publishes good practices on managing assessments and work:

• https://rgcq.org/

Accounting under ASPE: principles and entries

Many syndicates prepare their financial statements using accounting policies inspired by ASPE. The goal is to accurately reflect:

• the decision to collect the assessment (resolution, schedule);
• the receivable from co-owners;
• the allocation of the amounts (current operations, specific project, contingency fund);
• the progress of the work and use of the budget.

General principles under ASPE (usual approach):

1. Recognition of the special assessment
   When the resolution is adopted and assessment notices are issued, recognize the revenue and receivable.
   Sample entry: Debit Accounts receivable – co-owners / Credit Revenue – special assessment (or Contributions – Project X).
2. Collection
   When payments are received: Debit Bank / Credit Accounts receivable – co-owners.
   Set out the terms: instalments and interest on late payments, if provided for in the by-laws of the immovable.
3. Allocation to the project or contingency fund
   If the assessment directly finances targeted work during the fiscal year, record the project expenses as incurred (expense accounts by nature or project, with budget tracking).
   If the assessment is intended to replenish the contingency fund, credit a “Transfer to contingency fund” account or an equity account (according to your policy) and ensure separate traceability.
4. Project expenses and capital assets
   Maintenance and repair work is recorded as an expense.
   Major replacements of common elements that provide future benefits may be capitalized and amortized, depending on the policy and materiality.

Allocation to the contingency fund

When the annual general meeting decides on a special assessment to fund the contingency fund:

• Record the assessment as revenue and, during the same period, transfer it to a dedicated fund account (presented separately in the statement of financial position or statement of changes in net assets, depending on your financial statements).
• Keep a separate register of disbursements related to major repairs and replacements, linked to the contingency fund study and maintenance logbook.

Major work versus insured loss

• Planned work (contingency fund study): use project tracking, with a budget, calls for tenders (RBQ) and documented disbursements.
• Insured loss: if insurance reimburses part of the costs, record the insurance proceeds receivable separately. The deductible and uninsured costs may be financed by a special assessment, in accordance with the declaration of co-ownership.

Examples of simplified entries

• Notice and recognition: Dr Accounts receivable – co-owners / Cr Revenue – special assessment.
• Payment: Dr Bank / Cr Accounts receivable – co-owners.
• Work paid: Dr Expenses – Project X (or Capital asset) / Cr Bank.
• Transfer to the fund: Dr Revenue – special assessment / Cr Contingency fund (separate account, depending on presentation).

Good presentation practices:

• In the notes, provide separate information on the purpose, total amount, schedule, balance to be collected and progress of the work.
• Maintain consistency with your accounting policy, as approved by the board.

For assistance with bookkeeping, see our financial management services: https://www.multirent.ca/services/#gestion-financiere

Tax impact: GST/QST and syndicate income tax

Tax treatment depends on the syndicate’s activities and status. Many syndicates operate on a not-for-profit basis, but this tax status must meet certain criteria. Refer to Revenu Quebec for information on NPOs and registration for GST/QST:

• NPOs – Revenu Quebec: https://www.revenuquebec.ca/fr/entreprises/impots/organismes-sans-but-lucratif-osbl/
• GST/QST – Revenu Quebec (businesses): https://www.revenuquebec.ca/fr/entreprises/taxes/tpstvq/

Key points to confirm with your tax professional:

• GST/QST on special assessments: an assessment for common expenses or the contingency fund, paid by members, without a separate taxable supply, is generally not taxable. However, if the syndicate makes taxable supplies (e.g., leasing parking spaces to non-members), it may have to register and collect tax on those supplies.
• Income tax: a not-for-profit syndicate may be exempt from tax on certain surpluses if the criteria are met. Otherwise, a portion of its revenue (interest, rentals to third parties, etc.) may be taxable.
• Deductibility: co-owners normally cannot deduct their special assessment for personal income tax purposes. Exceptions exist for units held as rental property; consult a professional and Revenu Quebec’s guidelines.

Governance tip: state the nature of the assessment (Project X, contingency fund, insured loss) on the notices to facilitate tax analysis and transparency.

Governance, annual general meetings and communication with co-owners

A successful special assessment depends on strong governance and clear communication.

• Decision-making process: depending on the declaration of co-ownership, the board or annual general meeting approves the assessment. Document the resolution and attach it to the minutes.
• Budget and calls for tenders: for major work, comply with RBQ requirements for contractors and keep the contracts and certificates.
• Schedule and terms: specify the due dates, permitted instalments and late-payment interest (if provided for).
• Monitoring and accountability: at the next annual general meeting, present the progress of the work, the balance of the assessment to be collected and the expenses incurred, with supporting documents.

Useful resources:

• LégisQuébec – Civil Code of Quebec (rules on common expenses and the contingency fund): https://www.legisquebec.gouv.qc.ca/fr/document/ccq-1991
• RBQ – Contractors and compliance: https://www.rbq.gouv.qc.ca/
• OACIQ – Divided co-ownership (documents to provide on a sale, syndicate certificate): https://www.oaciq.com/

To equip your board, see our blog: https://www.multirent.ca/blogue/

Frequently asked questions (FAQ)

Q1. Must a special assessment always go to the contingency fund?
No. It may directly finance a specific project (e.g., roof replacement) or replenish the contingency fund if the annual general meeting decides to do so. In all cases, ensure separate tracking and traceability of the amounts.

Q2. How should a special assessment be allocated among co-owners?
Follow the relative value of the fractions stated in the declaration of co-ownership, in accordance with the Civil Code of Quebec (s. 1064). Avoid flat allocations that do not respect these percentages, unless a specific clause in the declaration of co-ownership provides otherwise.

Q3. Is a special assessment taxable (GST/QST)?
Usually not when it is a contribution between members to finance common expenses or the contingency fund. However, confirm the syndicate’s activities as a whole and its tax registration if taxable supplies exist.

Q4. How should the special assessment be presented in the financial statements?
Present it as separate revenue, with notes specifying the purpose, amount, schedule and balance to be collected. If it funds the contingency fund, show the transfer and the fund balance separately.

Q5. Is a contingency fund study required to justify a special assessment?
A contingency fund study is not required for every one-time decision, but it guides the planning of major repairs. Without an up-to-date contingency fund study, the risk of an insufficient contingency fund and unforeseen special assessments increases.

Remember that clear documentation, compliance with the Civil Code of Quebec and accounting consistent with ASPE strengthen co-owner confidence and facilitate day-to-day financial management.

To learn more about professional support (financial, administrative and operations management), see: https://www.multirent.ca/services/

This article provides general information and does not constitute legal advice. Consult a lawyer or notary for advice about your situation.

This article provides general information and is not a substitute for advice from a tax professional or accountant. Refer to Revenu Quebec and the CRA for exact requirements.

Do you manage a co-ownership in Quebec? Discover our packages or contact us to assess your needs.