| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1052251040629
Date of advice: 13 May 2024
Ruling
Subject: Rental properties - capital works
Question
Are the costs incurred to replace the kitchen and shower taps within your property a depreciable expense underDivision 43 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
The kitchen and bathroom taps are affixed permanently to the building and cannot be easily removed without causing damage. As such, they are considered to form part of the fabric of the building. The expenditure on replacing them results in a renewal or reconstruction of an entirety. The expenditure is capital in nature. An annual deduction of 2.5% of the cost of this item is allowable under Division 43 of the ITAA 1997.
This ruling applies for the following period:
Year ended XX XXXX 20YY
The scheme commenced on:
XX XXXX 20YY
Relevant facts and circumstances
You purchased a property.
You have the sole ownership interest in the property.
The property was made available for rent in 20YY.
In 20YY, you replaced the kitchen and shower taps in the property.
You have claimed depreciation for the replacement of the kitchen and shower taps since 20YY.
On XXXX 20YY, you were advised that the kitchen vanity taps and other taps within the property were leaking. You requested the property manager to organise a plumber to attend to the property on the same day.
The plumber attended the property and replaced the kitchen and shower taps as they could not be shut off.
On XX XXXX 20YY, you received the invoice detailing the costs of the replacement of kitchen and shower taps totalling $XX.
You have paid the plumber's invoice for the kitchen and shower taps.
Relevant legislative provisions
Income Tax Assessment Act 1997 Division 43