It's important to correctly categorise upkeep expenses for your rental property to ensure they are treated correctly for tax purposes. Our quick reference guide in the table below will help you to work out which category your expense relates to.
If your property is your holiday home, you can't claim deductions for repairs and maintenances unless the property is used (or held for use) mainly to produce rental income.
|
Situation |
Category |
Example |
Claim at |
|---|---|---|---|
|
Replacing something that is worn out, damaged or broken while renting out the property |
Repair |
Replacing part of a fence damaged in a storm Hiring a plumber to fix a leaking tap |
Repairs and maintenance |
|
Preventing or fixing deterioration of an item that occurred while renting out the property |
Maintenance |
Repainting faded interior walls Re-oiling a deck |
Repairs and maintenance |
|
Repairing damage that existed when the property was bought (whether it was known at the time of purchase or not) |
Initial repair |
Fixing floorboards or repairing deteriorated window frames where the damage existed when the property was bought |
Capital works This is an initial repair and the construction expenditure is written off at 2.5% over 40 years. This doesn't include initial repairs to depreciating assets in the property, for which no deduction can be claimed. |
|
Replacing an entire structure |
Capital works |
Replacing an entire fence |
Capital works |
|
Renovating or adding a new structure to the property |
Capital works |
Adding a carport |
Capital works |
|
Installing a brand-new appliance or window covering |
Depreciating asset |
Buying a new dishwasher Installing new blinds |
Capital allowances |