Guide to claiming business deductions

Repairs, maintenance and replacement expenses

You can claim a deduction for repairs to machinery, tools or premises you use to produce business income, as long as the expenses are not capital expenses. These allowable claims include the cost of:

• painting
• conditioning gutters
• maintaining plumbing
• repairing electrical appliances
• mending leaks
• replacing broken parts of fences or broken glass in windows
• repairing machinery.

To repair something generally means to fix defects, including renewing parts. It does not mean totally reconstructing something. You do not have to own the property or item that is repaired.

Repairs do not include:

• substantial improvements to an item or property, such as replacing a dilapidated ceiling with an entirely new and better ceiling - you may be able to include this type of expense in the cost base of the asset when working out capital gains
• repairs made to machinery, tools or property immediately after you purchase or acquire them - this is because the price you paid for an item reflects its condition, so the cost of any such repairs are capital expenses.

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