Purchasers Strata Inspections Pty Ltd Online Commentary

INCOME TAX

An owners corporation is liable for Australian Income Tax like any other company. However, some of the “income” received by the owners corporation is not taxable. This is known as “mutual income”. Other income is taxable at normal company rates. It includes such things as interest on invested funds, income from vending machines, rental of common property areas, etc..

From a purchaser’s perspective there will be a concern if the owners corporation has received taxable income but has not lodged tax returns. In that event, the risk is that the Australian Tax Office may conduct an audit and impose retrospective assessments for tax and penalties. The purchaser will have to pay their share of the assessment despite the fact that it relates to a period prior to their ownership.

This section of the report will indicate whether the owners corporation appears to receive taxable income and, if so, whether tax returns are lodged. From this information the purchaser will be able to determine whether there is any risk of retrospective assessments.

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About The Commentary

This commentary has been written by Gary Bugden OAM DUniv. Gary is the Chairman of the Board of Directors of Purchasers Strata Inspections Pty Ltd.

Gary Bugden has been Australia’s leading authority on strata and community titles for the past 40 years.

He has authored numerous books and loose-leaf services on strata related subjects and has provided this commentary to assist purchasers to interpret and apply the contents of this report.

The commentary is not intended as a substitute for legal advice and purchasers should refer any concerns they have about the contents of the report to their solicitors or conveyancers for proper analysis and advice.

While every effort has been made to ensure the accuracy and relevance of this commentary, neither Gary Bugden nor Purchasers Strata Inspections Pty Ltd will accept any responsibility for any inaccuracy or incompleteness of its contents, nor if at the time of use it is out of date. They each intend to rely upon this exclusion of liability in the event that a purchaser suffers any loss or damage as a consequence of relying upon any part of this commentary.

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