Private ruling: Rental property repairs
Date of advice: 10 February 2021
Published: April 2021
Ruling period: 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the expenses incurred in repairing damage to your investment property deductible as repairs? | A1: Yes. Expenses you have incurred to repair the property are deductible under section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997). These repairs meet the requirements set out in Taxation Ruling TR 97/23. Further information about repairs can be found by searching 'QC 23635' on ato.gov.au

Relevant facts and circumstances: You purchased an investment property. The property was made available to rent from the date of acquisition and has subsequently been tenanted or available for rent. The property was built on clay soil which is prone to expansion and contraction depending on the moisture content in the soil causing damage to the foundations, brickwork and internal walls. After many years of drought followed by a year of heavy rainfall, the shrinking then expansion of the soil has caused damage to the foundations and they have become unstable. Engineering works were required to repair and strengthen the foundations, cracked brickwork, walls and steps due to the movement in the soil. Rotting and cracked decking boards were also replaced. Once the repair works had been completed, painting was undertaken on the affected surfaces and decking.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 25-10