Are any of these expenses tax deductable...?

[depreciator]

Buyers fees can't be depreciated. I think that's what you were asking above. Depreciation relates to the wear and tear on structures and fixtures and fittings. As Redwing said, most people would add them to the cost base for CGT calcs down the track. As Redwing alluded, there is one BA who tells people his fees can be claimed as an expense. His clients will be in for a surprise one day.
Sinking funds tend to be used for maintenance around a property. As such, I would imagine most accountants would claim sinking fund contributions as a deduction.
Special Levies are more complictated. They are usually imposed when a building needs some major work e.g new balcony railings. The nature of the work funded by the levy dictates how it should be treated. If the work is Capital (or building stuff) then the levy contribution would be claimed at 2.5%. The above is just my opinion. I would say there are lots of people who claim special levy contributions as immediate deductions. I reckon they would be in strife if the ATO quizzed them.
Scott

 

[CaptKirk]

I heard that Sinking Fund payments (usually a part of strata fees) are NOT immediately tax deductible.

 

[CaptKirk]

i believe funds paid out of sinking fund, you need to determine impact of those - maybe add to capital works deduction ??? Need to check with property tax accountant.

 

[matto_]

Nope, added to cost base (capital expense) "I believe", though some BA's may infer otherwise?

is this similar to a number of the different seminars/education options??

ie. renovation seminar, development seminar, land banking seminar...........

 

[handyandy]

I heard that Sinking Fund payments (usually a part of strata fees) are NOT immediately tax deductible.

As per Depreciator's post sinking levies contributions as part of your normal levies are immediately deductible.

http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2004934/00001

The payment of regular contributions levied by the body corporate into an administration fund or general purpose sinking fund are considered to be payments for provision of services by the body corporate. Where the payments are made in relation to a rental property there is a sufficient connection with the earning of assessable income from the rental property.
The fact that the body corporate may subsequently use some of the contributions levied for capital expenses is not relevant in determining the nature and purpose of the payments made by the taxpayer to the body corporate. The payments are therefore not considered to be capital in nature.
Accordingly, the taxpayer is entitled to a deduction under section 8-1 of the ITAA 1997 for the payment of these regular contributions levied by the body corporate and paid into an administration fund or general purpose sinking fund.
​

Special levies made for capital expenses are not immediately deductible

http://www.ato.gov.au/individuals/content.aspx?menuid=0&doc=/content/00270214.htm&page=9

Payments you make to body corporate administration funds and general purpose sinking funds are considered to be payments for the provision of services by the body corporate and you can claim a deduction for these levies at the time you incur them. However, if the body corporate requires you to make payments to a special purpose fund to pay for particular capital expenditure, these levies are not deductible. Similarly, if the body corporate levies a special contribution for major capital expenses to be paid out of the general purpose sinking fund, you will not be entitled to a deduction for this special contribution amount. This is because payments to cover the cost of capital improvements or repairs of a capital nature are not deductible; see Repairs and maintenance and Taxation Ruling TR 97/23. You may be able to claim a capital works deduction for the cost of capital improvements or repairs of a capital nature once the cost has been charged to either the special purpose fund or, if a special contribution has been levied, the general purpose sinking fund; see Capital works deductions.
​

I have come across something previously which seemed to indicate any special levies are not deductable. But the previous quote seems to indicate this would only be if used for capital items. So if the strata was short fund and had to raise a special levy to top up the Admin Fund then this should still be deductable.

Cheers

 

[petrodrill]

eTax category for borrowing expenses

I am using eTax to prepare tax return. Can someone advise under which category (A to U) 'Borrowing Expenses' will fall? There is a category for Interest on loan.....should I include borrowing expenses in this?

 

[Terry_w]

I am using eTax to prepare tax return. Can someone advise under which category (A to U) 'Borrowing Expenses' will fall? There is a category for Interest on loan.....should I include borrowing expenses in this?

No, borrowing expenses are not interest and they are treated differently - claimed over 5 years.

 

[redwing]

No, borrowing expenses are not interest and they are treated differently - claimed over 5 years.

Or earlier if you refinance within that period, you then get 5 years on the new borrowing expenses

 

[Terry_w]

Or earlier if you refinance within that period, you then get 5 years on the new borrowing expenses

Good pick up

Five years or the life of the loan whichever is shorter.

 

[DaveM]

Heres a curly one, is interest charged on loans/credit cards for repairs etc deductible?

eg if someone needed to replace a hot water service and the LL did not have the money and paid on credit card then carried the balance on the credit card and incurred interest.

another eg, a fully furnished apartment with a furniture and appliance package on CHP where interest is built into the hire cost.