Edited version of private advice

Authorisation number: 1052458008578

Date of advice: 31 October 2025

Ruling

Subject: Rental property deductions - repairs

Question 1

Are you entitled to an immediate deduction for the repair expenses listed in Table A relating to your rental property under section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997)?

Answer

Yes.

Section 25-10 of the ITAA 1997 allows a deduction for the cost of repairs to premises used for income producing purposes, to the extent that the expenditure is not capital in nature.

Taxation Ruling TR 97/23 Income tax: deductions for repairs explains the circumstances in which deductions for repairs are allowable. TR 97/23 states that what is a repair for the purposes of section 25-10 of the ITAA 1997 is a question of fact and degree in each case having regard to the appearance, form, state and condition of the particular property at the time the expenditure is incurred and to the nature and extent of the work done to the property. The ruling further states that repairs mean the remedying or making good of defects in, damage to, or deterioration of, property. A repair merely replaces a part of something or corrects something that is already there and has become worn out or dilapidated.

The repair expenses listed in Table A are deductible under section 25-10 of the ITAA 1997.

Question 2

Are you entitled to an immediate deduction for the maintenance expenses listed in Table B relating to your rental property under section 8-1 of the ITAA 1997?

Answer

Yes.

Maintenance work, such as oiling, sanding or cleaning something that is otherwise in good working condition and only requires attention to prevent the possibility of its going wrong in the future, are not 'repairs' in terms of section 25-10 of the ITAA 1997.

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature.

The maintenance expenses listed in Table B are deductible under section 8-1 of the ITAA 1997 are they were incurred in gaining or producing assessable income and are not of a capital, private or domestic nature.

This ruling applies for the following period:

Year ended 30 June 20YY

The scheme commenced on:

DD MM 20YY

Relevant facts and circumstances

•                     On DD MM 20YY, you purchased the property located at the property.

•                     On DD MM 20YY, you began leasing the property. The property was managed by a real estate agency.

The previous tenants vacated the property on DD MM 20YY after nearly XX years of continuous tenancy. All repairs and maintenance issues were picked up during the final inspection on that day.

•                     On DD MM 20YY, you were invoiced by Company A.

•                     On DD MM 20YY, you were invoiced by Company B Sanitair for a premium split air conditioner clean.

•                     On DD MM 20YY, you were invoiced by Company C for sub floor works, new ventilation works and living room wall works.

•                     On DD MM 20YY, you were invoiced by Company D ASL Painting Pty Ltd for exterior and interior painting and preparation.

•                     On DD MM 20YY, you were invoiced by Company E for floor sanding, filling nail holes and applying 3 coats of poly solvent base satin finish.

•                     On DD MM 20YY, you were invoiced by Company F.

•                     On DD MM 20YY, you were invoiced by Company G.

•                     On DD MM 20YY, you were invoice by Company G.

Table 1: Table A

Table 2: Table B

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1

Income Tax Assessment Act 1997 section 25-10