Strata Special Assessment(Levy) for a rental property tax deduction in BC

[ryrysup]

Hi There, 

I have a rental property where the balconies on one side of the builder had been close due to needing repair (thankfully not my side). 

We received a special assessment from our strata of around $17k. My rental income is around 19k minus all expenses is around $7200 of taxable income. 

From research so far the special assessment needs to be a CCA but I have no idea how I could calculate that, the forms I found on CRA weren't super helpful. The project has already started as well and all the money has been spent by the strata. 

Whats my best approach for applying the Special assessment to my taxes. 

Thanks, 

R

 

 

 

[Geo123]

Hello ryrysup,

The CRA provides this guideline on determining if it is a current or capital expenditure (CCA) :

Does the expense maintain or improve the property?     The cost of a repair that improves a property beyond its original condition is probably a capital expense. If you replace wooden steps with concrete steps, the cost is a capital expense. Footnote 1     An expense that simply restores a property to its original condition is usually a current expense. For example, the cost of repairing wooden steps is a current expense.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/rental-income/current-expenses-capital-expenses.html

 

With regards to the proportion of the assessment you could use square footage of the condo vs the total building but you should check with the CRA.