Owners Corporations (OC) are treated as public companies for tax purposes. This means that an owners corporation must lodge a tax return for any year in which it receives assessable income.

Assessable Income for OC

Assessable income includes:

  • income from leasing common property
  • interest from investments
  • fees for issuing owners corporations certificates and copies of the register and records
  • sale or rentals of common property or personal property
  • fees for servicing lots.

It does not include:

  • annual fees, including contributions to any maintenance fund
  • special fees and charges, as these are ‘mutual income’.

OC Tax Return

An OC must:

  • have a tax file number if it earns one dollar or more of assessable income.
  • lodge its annual income tax return every 30 June. Unlike personal income tax, there is no tax-free threshold. All of an owners corporation’s assessable income will be taxed at the company tax rate.

An owners corporation without assessable income must inform ATO that it has no taxable income for the year.

Income from Common Property

If an owners corporation has earned income from common property, it must notify each lot owner of their portion of the assessable income by 14 July. This amount should be included in lot owners’ personal tax returns.

Similarly, if an owners corporation has made a capital gain or a capital loss from a transaction in respect of all or part of the common property, the gain or loss is not included in the tax return for the body corporate. Each proprietor or unit owner must include their share of the capital gain or loss in their own tax return based on their proportion of the lot entitlements.

Tax Ruling TR 2015/3: Income tax: matters relating to strata title bodies constituted under strata title legislation

Contact us today to find out how we can assist with the preparation and lodgement of owners corporation (OC) tax returns.

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