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Edited version of private advice
Authorisation Number: 1051927295642
Date of advice: 2 December 2021
Ruling
Subject: Deduction - rental property - repair
Question
Are the expenses associated with the partially restumping your rental property a repair under section 25-10 on the Income Tax Assessment Act 1997 and deductible in the 20XX income year?
Answer
Yes, based on the information provided to the Commissioner the restumping of the stilts on your rental property is a repair and is an allowable deduction under section 25-10 of the Income Tax Assessment Act 1997 in the 20XX income year.
This ruling applies for the following period:
Year ended 30 June 20XX.
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
Some time ago you purchased a property as your main residence.
At the time of purchase no issues were identified with the Property.
Sometime later you were relocated for work.
The Property was first made available for rent and soon tenanted out.
Approximately two years later the Property became vacant and rental income ceased.
At this time a rental inspection was conducted by the real estate agent in which time the restumping defect was first identified.
The real estate agents arranged a builder to inspect the Property.
The builder advised that the property should not be tenanted given the condition of the stumps noting they could fail at any time with people moving within the home.
The Property remained vacant for the works to be completed.
Not all stumps needed replacing, the remaining are still originals with no issues.
The Builder used galvanised steel with concrete footings, the closest option available with current technologies.
No other works were conducted during this period.
The cost of the replacing the stumps was $XX,XXX.
The invoice for the works was paid in full.
There was no insurance, or any other payments received by you for the works.
The Property was re-tenanted after the works were completed.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 25-10