Hello,
I have a slightly curly one.
I own an apartment in a strata-managed complex. I started renting this apartment out in December 2020 after using it as my sole residence from February 2018.
When I was using the apartment myself, I would often lock myself outside, so I attached a portable key safe to a fence outside the rear of the building to store a backup key if I needed it. The key was able to access the apartment building foyer, stairwell, the common bike room and my apartment.
Unfortunately, I forgot to remove the key safe before I left and in January 2021 I saw on the Facebook group for our apartment complex that the safe had been smashed to pieces and the key removed.
I quickly arranged for the locks on my tenant's front door to be changed and, being the honest person I am, advised the strata manager about what had happened. They proceeded to engage a locksmith to change the common locks (to enter the apartment building, stairwell and bike room) and gave every resident a separate new key.
They recently contacted me to recover the cost of doing that, to which I agreed, which amounted to around $1,100 and that has been sent to me this month (September 2021) as a separate invoice from my strata manager. The full cost was actually around $1,800, but they had taken the opportunity to improve the locks and $1,100 represents the like-for-like replacement value.
I have a few questions:
- Is this deductible for me?
- If so, should the replacement of locks be reflected as an immediate deduction or as a depreciating asset?
- If a depreciating asset, are the locksmith's fees included in the cost base, or do those have a separate treatment (i.e. as an immediate deduction)?
- Given the strata company incurred the expense in January/February 2021 but I have only been invoiced for it in September 2021, should it be reflected in the 2020/21 or the 2021/22 tax year?
Thanks
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