Many investors who are either planning to, or own a strata property, are unsure whether Body Corporate Fees can be claimed as a Tax Deduction.

It depends on the type of Fees charged and there are usually 3 types of Body Corporate Fees:

• Admin Levy

Administration Fund Levy is for general running expenses of the complex and is tax deductible

• Sinking Fund Levy

Is a levy that is imposed on a regular basis, to cover non routine expenses and is deductible

• Special Purposes

Is a levy to pay for major works or expenses and is not deductible if the money is spent on capital works.

From an Investment Property Owners’ perspective, it would be better if the Strata collected more for the General Purpose Sinking Fund, rather than to wait until something major is required and it becomes a Capital Work and a Special Purpose Levy will have to be imposed, which is not deductible but is depreciable.

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