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Edited version of private advice
Authorisation Number: 1051710466257
Date of advice: 24 July 2020
Ruling
Subject: Rental property expenses - repairs
Question
Are your expenses deductible as repairs?
Answer
Yes. For the reasons you have given, you are entitled to claim a deduction for your share of the cost of repairing the damaged to your rental property. Your expenses meet the requirements in Taxation Ruling TR 97/23 and are deductible. Further information about repairs can be found by searching 'QC 55249' on ato.gov.au
This ruling applies for the following period:
Income year ended 30 June 2019
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You owned the dwelling as joint tenant with another person.
The property was purchased about 10 years ago.
The property was used solely for income producing purposes.
The first time you became aware of the structural issues was a few years ago when a report submitted by a firm of structural engineers commented on the issues affecting your property and that they believe was probably also more wide spread. This was more than 5 years after you acquired the property. The problems identified in the report were reinforcement corrosion and concrete spalling. No reason or cause for the corrosion and spalling was provided
Prior to the sale your property, a meeting of the body corporate which determined that a special levy would be imposed on all property holders to carry out urgent repairs due to reinforcement corrosion and concrete spalling.
To the best of your knowledge none of these defects were in existence at the time you and the joint owner purchased the property. The defects were noticed several years after purchase.
The special levy was paid before the property was sold.
The works to be carried out would restore the balconies to their original condition with additional structural support. The works were still in at the time you sold your interest in the property.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 25-10
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