Can you claim back the strata levy on a IP?

This will sound dumb but can you claim back the strata levy on a investment property? If so is it say $XXXX paid = $XXXX less from your total income over the year?
 
Are you talking about claiming back as in a refund?
Or do you mean claiming as a tax deduction (which you can).

As a tax deduction.

Say the unit earns $20,000 profit in rent a year. If the strata is $2000 a year (discounting all other deductions for the time being), does that mean my net profit would be $18000 and that is what i would be taxed on.
 
Your taxable income would be the total revenue (rent) less all deductions including (but not limited to) the hard expenses such as interest, council rates, water rates, strata fees, repairs etc and the soft expenses such as depreciation and amortisation of certain loan costs.
 
Your taxable income would be the total revenue (rent) less all deductions including (but not limited to) the hard expenses such as interest, council rates, water rates, strata fees, repairs etc and the soft expenses such as depreciation and amortisation of certain loan costs.

Thank you

Make sure it is a "fee" or "expense".
You can't claim sinking funds against income - it will be a captial item.

Cheers,

The Y-man

Right now the property im interested in has a strata of $1900. Of that $500 is a special levy to fix something within the complex. This will be going on for a few months apparently and go back to the normal strata of $1400.

Would that be classified as a sink fund?
 
Thank you



Right now the property im interested in has a strata of $1900. Of that $500 is a special levy to fix something within the complex. This will be going on for a few months apparently and go back to the normal strata of $1400.

Would that be classified as a sink fund?

According to the rental properties guide on the ATO website:
http://www.ato.gov.au/content/downloads/IND00191817n17290609.pdf

In my words (not theirs) general purpose sinking fund fees can be claimed. The distinction is that these funds are used for the long term maintenance and repair of the property (ie. repainting common property, etc). A special purpose sinking fund that is raised for capital expenditure, which is generally improvements, extentions,additions, or "repairs that are capital in nature", is not a claimable expense.

Regards
Alistair
 
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