Hi everyone,
I have a question relating to Special Levy.
Can I claim all 'Special levy - clear admin fund deficit' as deduction for the property in FY2020?
Thank you.
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3 replies
Hi @VANPHAN,
If you have a special levy related to a strata managed property then generally it is NOT immediately deductible.
Payments to body corporate administration funds and general purpose sinking funds are usually payments for services provided by the body corporate and are deductible at the time the levies are paid.
However the payment to a special purpose fund levied by a body corporate to pay for particular capital expenditure is not deductible.
If the body corporate levies a special contribution for major capital expenses to be paid out of the general sinking funds, you cannot claim a deduction for this special contribution. (Pg 15 Rental Properties 2020)
Deductions can be claimed for the decline in value of depreciating assets used to produce rental income and capital works deductions.
Hope this helps.
All replies
Hi @VANPHAN,
If you have a special levy related to a strata managed property then generally it is NOT immediately deductible.
Payments to body corporate administration funds and general purpose sinking funds are usually payments for services provided by the body corporate and are deductible at the time the levies are paid.
However the payment to a special purpose fund levied by a body corporate to pay for particular capital expenditure is not deductible.
If the body corporate levies a special contribution for major capital expenses to be paid out of the general sinking funds, you cannot claim a deduction for this special contribution. (Pg 15 Rental Properties 2020)
Deductions can be claimed for the decline in value of depreciating assets used to produce rental income and capital works deductions.
Hope this helps.
Hi @Jodie_ATO ,
I have the same question as @VANPHAN. In the 2020-21 FY I had two special levies:1. a "Special levy - repaying administrative fund deficit"
2. a "Special Levy - legal costs".
Both of these amounts were raised against the administrative fund. They were not for Capital expenditure.
As they have been raised against the administrative fund and are not capital expenditure, does this mean I can immediately deduct these expenses? Or is there another treatment for these expenses?
Any guidance will be much appreciated.
Thank you.
Ps. I have read the ATO Rental property Guide 2021, but it only mentions about special purpose fund levied for capital expenditure not being deductible. There is no mention of Special Levies for the administrative fund.
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