Claiming Maintenance, Repairs & Improvements

Claiming Maintenance, Repairs & Improvements

Claiming Maintenance, Repairs & Improvements

One of the most common mistakes made by property investors when completing their annual tax return is confusing repairs, maintenance and improvements.
 
According to the Australian Taxation Office (ATO), repairs are considered work completed to fix damage or deterioration of a property, such as replacing part of a damaged fence. This occurs when an asset is already damaged or deteriorated and therefore requires repairing.
 
Maintenance, on the other hand, is work completed to prevent damage or deterioration of an asset. For example, oiling a deck is considered maintenance as it helps to preserve the quality of the property and prevent future corrosion.
 
A capital improvement occurs when the condition or value of an item is enhanced beyond its original state at the time of purchase. This must then be classified as either a capital works deduction or as plant and equipment depreciation.
 
It’s vital landlords stay within the law so we recommend obtaining a Tax Depreciation Schedule from BMT Tax Depreciation to maximise your yield.

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