Common property in blocks of units

So who owns the common property in a block of units, the strata trust or the owners. Legally it depends on the state legislation.

However, in Taxation Ruling TR 2015/3 the Commissioner simplifies this

40. Each strata title legislation is different in its description of how common property is held. Notwithstanding these differences, the Commissioner will accept, in relation to strata schemes registered under all the State and Territory Acts, that it is the proprietors, rather than the strata title body, that are entitled to the deductions under Division 40 and Division 43 of the ITAA 1997 and who are assessable on any income from common property under section 6-5 of the ITAA 1997.

So make sure the owners claim these deductions going forward.

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About Ken Mansell

As a stay at home Dad most of the week this is my way of pretending I am still the tax counsel of ASX and SEC listed companies, working at big 4 firms, working at the Federal Treasury, on the Henry Review and at Parliament House for the previous government.
This entry was posted in Income Tax, Rulings. Bookmark the permalink.

One Response to Common property in blocks of units

  1. Owen Perrin says:

    G’Day Ken,

    I am a QS and in the process of preparing depreciation schedules for a block of units in QLD.
    I would like clarification on apportionment of Division 43 common property to unit owners. Is it acceptable to value all Div43 items within each unit (excluding wall & ceiling linings and paint) to that unit and then to apportion the remainder of Div43 (structure, envelope, facade & common areas) to each unit using the appropriate lot entitlement for each unit.

    My approach to assessment would be:
    1. Estimate common property plant (Div40)
    2. Estimate unit plant (Div40)
    3. Estimate unit capital works (Div43)
    4. Determine total construction cost (less exclusions such as demolition)
    5. Determine common property capital works using the following calculation: point 4 – (points 1+2+3)

    Note that items 1-3 would also include apportionment of preliminaries and design costs where applicable.

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