ATO Interpretative Decision

ATO ID 2002/330 (Withdrawn)

Income Tax

Rental property repairs - replacing worn carpet by polishing existing floorboards
FOI status: may be released
  • This ATO ID is withdrawn. Guidance on the basis of the decision in this ATO ID can be found in Taxation Ruling TR 97/23 Income Tax: deductions for repairs.
    This document has changed over time. View its history.

Status of this decision: Decision withdrawn 24 March 2017.
CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.


Is the taxpayer entitled, under section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997) to a deduction for expenditure incurred in removing worn carpets and polishing existing floorboards in a rental property?


Yes. The taxpayer is entitled, under section 25-10 of the ITAA 1997, to a deduction for expenditure incurred in removing worn carpets and polishing existing floorboards in a rental property.


The taxpayer owns a residential rental property.

The taxpayer removed carpet in the property and has polished the existing floor boards.

Reasons for Decision

Section 25-10 of the ITAA 1997 allows a deduction for expenditure incurred for repairs to premises or depreciating assets held or used solely for the purpose of producing assessable income.

Taxation Ruling TR 97/23 explains the circumstances in which something will be considered to be a 'repair' and an allowable deduction.

Paragraph 88 of TR 97/23 states that a repair involves a restoration of something without changing its character. The significant factor is the restoration of efficiency rather than exact repetition of form or material. For example, in Case 51 (1960) 9 CTBR (NS) 328, it was held that the replacement of a galvanised iron roof with concrete roof tiles was a repair as it did little more than meet a need for restoration. The material in question was designed to perform substantially the same function as that which it replaced.

Polished floorboards perform substantially the same function as the carpet. The materials and processes used in the repair do no more than restore the floor to a functional walking surface (Example 8 in TR 97/23).

Replacing worn carpets in a rental property by polishing the floorboards does not materially alter the character or functionality of the rental property. Nor does it increase the life of the rental property.

The removal of the carpets and polishing of the floorboards is a repair. Accordingly, the expenditure incurred is deductible under section 25-10 of the ITAA 1997.

Date of decision:  27 September 2001

Legislative References:
Income Tax Assessment Act 1997
   section 25-10

Case References:
Case 51
   (1960) 9 CTBR(NS) 328

Related Public Rulings (including Determinations)
TR 97/23

Deductions and expenses
Rental expenses
Repairs & maintenance expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  28 March 2002
Date reviewed:  9 February 2015

ISSN: 1445-2782

  Date: Version:
  27 September 2001 Original statement
You are here 24 March 2017 Withdrawn