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Edited version of private advice
Authorisation Number: 1051637438457
Date of advice: 19 February 2020
Ruling
Subject: Rental property expenses
Question
Can you claim a deduction for the special levy imposed by the strata body?
Answer
Yes. 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:
Year ended 30 June 2019
Year ended 30 June 2020
The scheme commences on:
1 July 2018
Relevant facts and circumstances
You purchased a strata titled property (the property) by private sale and did not obtain a building report.
The property was your main residence.
After a number of years you leased the property to tenants as an investment property.
It was identified that a retaining wall and fence in a common area of the complex required maintenance. It was also identified that the exterior of the complex required to be repainted and deteriorated seal to external windows required replacing (collectively referred to as the identified issues). Quotes to rectify the identified issue were obtained.
An Annual General Meeting (AGM) was held by the Strata Company during which the identified issues were raised.
The Strata Company obtained a loan from a financial institution to rectify the identified issues.
To pay the loan, the Strata Company has imposed a special remedial works levy on the unit holders totalling.
You chose to pay this amount in two instalments on two separate dates.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 25-10
Income Tax Assessment Act 1997 division 43