Question:
I recently bought my first investment property, there was an extra $2000 special levy charged by the body corporate to repaint the whole building. I presume it falls under repair and maintenance so it is tax deductible, right?
Answer:
As the building was in need of a repaint when you purchased the investment property, and the painting was not due to wear and tear related to rental activities, it would not be seen as repair and maintenance cost – it would be regarded as an improvement.
This cost will be added to the purchase cost of the property (in other words it would be part of the property cost base) and you should keep the body corporate invoice for this special levy until five years after the investment property is sold.