Repairs, maintenance and replacement expenses
You can claim a deduction for repairs and maintenance to machinery, tools or premises you use to produce business income, as long as the expenses are not capital expenses.
What you can claim
You can claim the cost of allowable repairs and maintenance, which can include:
- 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 it.
You do not have to own the property or item that is repaired in order to claim a deduction.
What you can’t claim
Repairs do not include:
You may be able to 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.
- substantial improvements to an item or property – for example, installing a new ceiling
- repairs made to machinery, tools or property immediately after you purchase or acquire them – this is because the price you paid reflects the item’s condition.
- These are capital expenses. You can generally claim a deduction for such expenses under the general depreciation provisions (for items), or the capital works provisions (for property). Building improvement costs, and capital works deductions claimed, would also be taken into account when working out a capital gain or loss on disposal of the property.