• Body corporate fees and charges

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    You may be able to claim a deduction for body corporate fees and charges you incur for your rental property. Body corporate fees and charges may be incurred to cover the cost of day-to-day administration and maintenance or they may be applied to a special purpose sinking fund.

    If the fees and charges you incur include a contribution to a special purpose sinking fund you will only be able to claim a deduction for that portion of the fees and charges that relate to the cost of day-to-day administration and maintenance. This is because payments to a special purpose sinking fund are usually to cover the cost of capital improvements or major repairs and are therefore not deductible. See Taxation Ruling TR 97/ 23-Income tax: deductions for repairs. To find out how to get this publication, see the inside front cover. You may be able to claim a capital works deduction for the cost of capital improvements or capital repairs once the cost has been charged to the sinking fund-see Capital works (special building write-off) deductions.

    If the body corporate fees and charges you incur are for things like the maintenance of gardens, incidental repairs and building insurance, you cannot also claim deductions for these as part of other expenses. For example, you cannot claim a separate deduction for garden maintenance if that expense is already included in body corporate fees and charges.

    Last modified: 18 Jul 2008QC 16578