Property Management on owners’ tax: What admin fees can be claimed?

Baxton.me
20 September 2017

Property Management on owners’ tax: What admin fees can be claimed?

Continuing its focus on immediately deductible expenses with regard to rental properties and tax, Baxton Property Management in Hobart takes a closer look at some of the administrative expenses that you can deduct immediately.

Corporate body fees and charges

Body corporate fees and charges are normally split into two different categories i.e. fees for day to day administration as well as a general purpose sinking fund, and maintenance and contributions to a special purpose fund.

You are allowed to claim for fees that are used by the body corporate to administer and maintain your rental property, as they can reasonably be considered legitimate expenses in maintaining your rental property and improving the generation of rental income. Likewise, contributions to a general purpose sinking fund are permitted, as the general purpose sinking fund is used by the body corporate to fund maintenance of a capital nature, of the common property. Examples of this use would be the repainting of the common property.

Contributions to a special purpose fund are however not claimable as deductions. It is generally assumed that special purpose funds are used for additions and renovations of a capital nature to the common property. You would only be able to claim contributions to this fund under the capital building works regulations according to which deductions are usually spread over a period of several years.

Lease document expenses

Costs incurred during the preparation, registration and stamp duty on a lease agreement are deductible in relationship to your use of the rental property for rental income. This also applies to the surrender of a lease in areas of Australia where most property is held from the crown on a 99-year leasehold.

Property agent’s fees and commissions

You are allowed to claim any fees and commissions that you are charged by a rental property agent or manager for the management and inspection of the property, and for the collection of rent on your behalf. You are not, however, allowed to claim for expenses charged by an agent for the acquisition or sale of the rental property.

As stated earlier all these expenses are viewed as immediate and you are allowed to claim them in the year that they were incurred.

The information contained in this article is based on the authors opinion only and is of a general nature which is not indicative of future results or events and does not consider your personal situation or particular needs. Professional advice should always be sought relevant to your circumstances.

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