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Edited version of private advice
Authorisation Number: 1052193548960
Date of advice: 16 November 2023
Ruling
Subject: Deduction - rental property expenses
Question
Can you claim a deduction of $X for the cost of repairs to your rental property?
Answer
Yes.
This ruling applies for the following period:
Income year ended X MONTH 20XX
The scheme commenced on:
X MONTH 20XX
Relevant facts and circumstances
You owned a rental property for several years (the Property).
The Property was rented at market rate.
You had a long-term tenant who caused substantial damage and left the Property in a state of disrepair.
You tried to sell the Property but in its state of disrepair resulted in offers below market prices.
You then decided to repair the damage and repaint the Property after the many years of neglect.
Without the repairs, the Property was not able to be rented or sold. A letter from a City Council confirms this.
The repair work commenced in MONTH 20XX and finished in MONTH 20XX.
The exterior walls were partly imitation brick cladding (made of asbestos), partly weather board and partly fibro. When you removed the fibro and cladding, some of the weatherboards underneath needed replacing and some just needed sanding back.
When the exterior walls were repaired/replaced, it made it easier for the whole of the exterior and interior of the house to be painted.
The roof was repaired and painted.
The floors were sanded and repolished as they were scratched and worn.
You considered re-letting the Property but was made an offer of sale and the property was subsequently sold.
The contract for sale of the Property was prepared on the X MONTH 20XX.
The tenants vacated the Property on the X MONTH 20XX.
The materials used were mainly paint and filler and various hardware items.
You paid for all the repairs. You received no compensation or insurance.
The repairs were done by various tradesman and material supplied by commercial/trades stores.
Breakdown of the repairs:
Minor fence repairs $X
Work requested by the agent $X
Fixing problems with the roof $X
Floor sanding and polishing $X
Painting - internal $X
Painting - external $X
Plumbing and waste disposal $X
The total repair cost of repairs claimed $X
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 25-10