Private ruling: Deductible repairs - rental property
Date of advice: 5 September 2025
Published: 27 October 2025
Ruling period: 1 July 20XX to 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is the amount of the Special Levy you paid to the strata body corporate in the 20XX income year, in respect of your rental property repairs, an allowable deduction under section 25-10 of the Income Tax Assessment Act 1997 ? | A1: Yes. You are entitled to a deduction under section 25-10 of the Income Tax Assessment Act 1997 for the special levy paid in the year ended 30 June 20XX that were used for the work carried out on the ceiling/roof, as the work is a repair to the unit which did not change its character and restored it to its original functionality.

Relevant facts and circumstances: 1. Individual A (you) is the sole owner of a strata unit (the unit). 2. The unit was purchased in 19XX. 3. The roof/ceiling of your unit is a cement slab. Part of that cement slab comprises the balcony of the upstairs unit. The balcony slab of the upstairs unit constitutes the roof/ceiling for part of your unit. 4. Apart from a period in 20XX, the unit has been rented continuously since its purchase. The current tenants have been the same tenants continuously since 20XX. They pay market rent. You have no relationship to the tenants other than landlord/tenant. The property is not managed by an agent. 5. In 20XX to 20XX, water penetration/ingress occurred to the ceiling of a bedroom and the lounge room of the unit. 6. In 20XX, the body corporate engaged specialist building consultants, who determined that damage to your unit was due to water ingress caused by failed waterproofing in the ceiling slab above your unit (being the balcony slab of the above unit). 7. In mid-20XX, specialist waterproofing and building consultants provided a report to the body corporate that included the preparation of specifications and tender documentation for the replacement of the membrane and associated works for the above unit's terrace to resolve water penetration problems into your unit below. 8. After obtaining competitive quotes, in accordance with the recommendations of the specialist consultant, the body corporate signed a building contract with a remedial builder in 20XX for a price of $XXX 9. Works were done using like for like materials that are of similar quality. 10. In 20XX, the body corporate raised a special levy for the remedial works. You received a levy notice for these works in the sum of $XXX. You paid this levy in 20XX. 11. The works were completed and all the special levy funds were spent on the work. 12. There was no insurance covering this expense.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 25-10 | Income Tax Assessment Act 1997 subsection 25-10 (3)