Hi
I am a landlord leasing an apartment in Melbourne, Vic. A few months ago I was billed for my tenant's water usage charges by mistake. The managing agent suggested that I paid the bill and she would forward the bill to the tenant and get them to refund the usage portion, which I did. However, the tenant still hasn't paid and is now moving out. So the agent has said I can claim the unpaid charges back from the rental bond. So all is good, but my question is, do I need to declare this on my tax return?
The ATO website says all amounts retained from the bond must be declared as assessable income, but in this case the amount held back is not income and is a non-deductible expense. I can only claim a deduction for the water service charges, not the water usage portion of the bill because they have been incurred by the tenant.
If I declare the amount held from the bond for the usage charges then I will pay tax for the extra amount and effectively won't be fully reimbursed for the bill.
I haven't been able to find any examples on the ATO website that fit my situation and would be grateful if anyone could shed some light on this.
Thanks in advance.
I am a landlord leasing an apartment in Melbourne, Vic. A few months ago I was billed for my tenant's water usage charges by mistake. The managing agent suggested that I paid the bill and she would forward the bill to the tenant and get them to refund the usage portion, which I did. However, the tenant still hasn't paid and is now moving out. So the agent has said I can claim the unpaid charges back from the rental bond. So all is good, but my question is, do I need to declare this on my tax return?
The ATO website says all amounts retained from the bond must be declared as assessable income, but in this case the amount held back is not income and is a non-deductible expense. I can only claim a deduction for the water service charges, not the water usage portion of the bill because they have been incurred by the tenant.
If I declare the amount held from the bond for the usage charges then I will pay tax for the extra amount and effectively won't be fully reimbursed for the bill.
I haven't been able to find any examples on the ATO website that fit my situation and would be grateful if anyone could shed some light on this.
Thanks in advance.