Strata or Bodies Corporate are required to lodge tax returns if they have $1 or more in assessable income that is not considered “mutual income.” For income tax purposes, a strata plan is treated as an Australian public company, even if it is self-managed. A tax return must be lodged for any year in which non-mutual income is earned, such as income from sources outside the group, like investment income. However, if the strata only derive income that falls under the principle of mutuality, which is not assessable, then a tax return does not need to be lodged.
Mutual Income (from owners) – NON-TAXABLE:
- Strata Levies
- Interest on Arrears
- Recoveries
Non-Mutual Income (from non-owners) – TAXABLE IN THE HANDS OF THE BODY CORPORATE:
- Interest from cash at bank or term deposits
- Monies collected from coin-operated laundry facilities (derived from tenants or the public)
Non-Mutual Income (from non-owners) – TAXABLE IN THE HANDS OF INDIVIDUAL LOT OWNERS:
- Income from communications tower leases
- Rent from common property apartments
- Income from advertising billboards
Example as per TR 2015/3 – A strata title body leases the rooftop of a residential rental property to a telecommunications company for $50,000 per year. The Commissioner allows proprietors to report this income in proportion to their unit entitlement and claim deductions under Division 40 and/or Division 43 of the ITAA 1997 for the common property.
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