Loading
This thread is archived and the information may not be up-to-date. You can't reply to this thread.
johnlink(Enthusiast)Enthusiast
23 July 2024

I have been compensated $500 for a fridge in my rental property that was listed as a chattel on the purchase agreement by the sales agent, but later found to belong to the tenant - so the sales agent made a compensation payment to me for the loss of this fridge asset, and included it on their annual property rental statement under income on a separate line titled "appliances" - should this be added to my rental income for taxation purposes and is it in fact a taxable payment?

258 views
1 replies
258 views
1 replies

Most helpful response

Most helpful replyATO Certified Response

AshleyATO(Tax Time Tech Expert)Tax Time Tech Expert
ATO Certified Response25 July 2024

Hi @johnlink,

 

The receipt of the $500 may impact the calculation of the ‘cost base’ of the property where it relates to the permanent reduction in the value of the property. This type of compensation is treated as a recoupment of part of the acquisition cost (that is you reduce the cost base by the amount of the compensation). It represents a decrease in the cost base (i.e. purchase price of the property).

 

Further information on CGT consequences and compensation can be found on our website compensation.

All replies

Most helpful replyATO Certified Response

AshleyATO(Tax Time Tech Expert)Tax Time Tech Expert
ATO Certified Response25 July 2024

Hi @johnlink,

 

The receipt of the $500 may impact the calculation of the ‘cost base’ of the property where it relates to the permanent reduction in the value of the property. This type of compensation is treated as a recoupment of part of the acquisition cost (that is you reduce the cost base by the amount of the compensation). It represents a decrease in the cost base (i.e. purchase price of the property).

 

Further information on CGT consequences and compensation can be found on our website compensation.

Featured articles

Renting out all or part of your home? What to include in your tax return

15 Apr 2026 · 4 min read time

How to work out your tax residency

15 Apr 2026 · 8 min read time

Top liked users

  1. Taxduck

    (Taxicorn)

    1288 likes

  2. Bruce4Tax

    (Taxicorn)

    1117 likes

  3. YellowPotato

    (Taxicorn)

    340 likes

  4. Ken_Oath

    (Master)

    199 likes

  5. knaresbro

    (Devotee)

    141 likes

Top contributors

  1. Bruce4Tax

    (Taxicorn)

    3397contributions

  2. Taxduck

    (Taxicorn)

    2829contributions

  3. YellowPotato

    (Taxicorn)

    903contributions

  4. knaresbro

    (Devotee)

    295contributions

  5. TobyJDodd

    (Devotee)

    176contributions

Loading
What is tax treatment for compensation paid to me for a property purchase error | ATO Community