Strata Title and Body Corporate — Federal Aspects in New South Wales

Source: Income Tax Assessment Act 1997 (Cth); A New Tax System (Goods and Services Tax) Act 1999 (Cth); Corporations Act 2001 (Cth); ASIC Regulatory Guide RG 140

Reviewed by the Commoner Law Editorial Team. Sourced from Commonwealth Acts of Parliament, federal regulations, and official government guidance. State-level information reflects each state's own Acts and court decisions. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards

Australian Federal Law

What is this right?

Strata and body corporate schemes are mainly governed by state law, but several federal rules have a direct impact on owners and investors in strata-titled property.

Tax deductions: Owners of investment units can claim strata levies (both administrative and capital works fund contributions) as a tax deduction under the Income Tax Assessment Act 1997. Capital works deductions are available at 2.5% per year over 40 years for buildings constructed after 15 September 1987.

GST: Strata levies on residential lots are generally GST-free. However, if a body corporate earns income from commercial activities (e.g., renting common property to a telco), it may need to register for GST once turnover exceeds $75,000 per year.

ASIC regulation: Some large strata or serviced-apartment schemes are classified as managed investment schemes under the Corporations Act 2001 and must be registered with ASIC. This is common in hotel-style strata and holiday-letting pools. If your scheme is ASIC-registered, you have additional rights to financial statements, member votes, and an independent compliance plan.

When does it apply?

You own an investment unit in a strata scheme and are lodging a tax return.
You are considering buying into a serviced apartment or hotel-strata scheme that may be ASIC-regulated.
Your body corporate earns commercial income and may be required to register for GST.
You are claiming capital works deductions on a strata property built after September 1987.

What to Do If You Have Tax or ASIC Questions About Your Australian Strata Property

Get a quantity surveyor's report for capital works deductions — it identifies depreciable items and maximises your claim. Reports typically cost $600–$800.
Check the ASIC managed investment schemes register if buying a serviced apartment — registration means the scheme is subject to Corporations Act protections.
Ask the body corporate secretary whether the scheme is registered for GST, especially if it has commercial income from common-area leases.
Keep all strata levy receipts — your accountant will need them at tax time if the property is an investment.

What should you NOT do?

Don't claim strata levies on your own home — deductions are only available for investment properties that produce assessable income.
Don't ignore ASIC-registered scheme disclosures — if the scheme requires a Product Disclosure Statement (PDS), read it carefully before buying.
Don't confuse capital works fund contributions with repairs — they have different tax treatment. Repairs are immediately deductible; capital works are spread over 40 years.
Don't assume all strata schemes are alike — a holiday-letting pool has very different federal obligations from a standard residential body corporate.

New South Wales Law

How New South Wales differs from federal law

NSW has the most developed strata title system in Australia, governed by the Strata Schemes Management Act 2015 (NSW) and the Strata Schemes Development Act 2015 (NSW). Over 80,000 strata schemes operate in NSW.

The 2015 Acts modernised NSW strata law significantly. Owners corporations must hold annual general meetings, maintain common property, establish administration and capital works funds, and comply with stricter financial transparency requirements.
Lot owners can vote to collectively sell or renew an entire strata scheme if at least 75% of lot owners (by unit entitlement) agree — a reform introduced to facilitate urban renewal of ageing buildings.
NSW Fair Trading provides a strata mediation service for disputes between lot owners, tenants, and owners corporations. If mediation fails, disputes can be taken to NCAT.
Owners corporations in NSW must take out building insurance covering the full replacement value, plus workers' compensation insurance if they employ anyone (including a building manager).
The Community Land Management Act 2021 (NSW) governs larger community title schemes (multiple strata schemes within a single community development).

Additional Steps in New South Wales

For strata disputes, first attempt resolution through the owners corporation. If unsuccessful, apply for mediation through NSW Fair Trading (13 32 20). Unresolved disputes can be taken to NCAT (ncat.nsw.gov.au). The Tenants' Union of NSW provides advice for tenants in strata schemes.

Relevant Law: Strata Schemes Management Act 2015 (NSW); Strata Schemes Development Act 2015 (NSW); Community Land Management Act 2021 (NSW)

Common Questions

When does strata title and body corporate — federal aspects apply?

You own an investment unit in a strata scheme and are lodging a tax return.You are considering buying into a serviced apartment or hotel-strata scheme that may be ASIC-regulated.Your body corporate earns commercial income and may be required to register for GST.You are claiming capital works deductions on a strata property built after September 1987.

What should I do about tax deductions and GST obligations for my strata property in Australia?

Get a quantity surveyor's report for capital works deductions — it identifies depreciable items and maximises your claim. Reports typically cost $600–$800.Check the ASIC managed investment schemes register if buying a serviced apartment — registration means the scheme is subject to Corporations Act protections.Ask the body corporate secretary whether the scheme is registered for GST, especially if it has commercial income from common-area leases.Keep all strata levy receipts — your accountant will need them at tax time if the property is an investment.

What mistakes should I avoid with strata title and body corporate — federal aspects?

Don't claim strata levies on your own home — deductions are only available for investment properties that produce assessable income.Don't ignore ASIC-registered scheme disclosures — if the scheme requires a Product Disclosure Statement (PDS), read it carefully before buying.Don't confuse capital works fund contributions with repairs — they have different tax treatment. Repairs are immediately deductible; capital works are spread over 40 years.Don't assume all strata schemes are alike — a holiday-letting pool has very different federal obligations from a standard residential body corporate.

Strata Title and Body Corporate — Federal Aspects in other states

Same topic, different jurisdiction. Pick the one that applies to you.