Private ruling: Rental deductions
Date of advice: 23 September 2025
Published: 24 November 2025
Ruling period: Year ended 30 June 2025
Date scheme commenced: 1 July 2024

Ruling: Q1: Is the painting of the entire interior, a repair and deductable? | A1: Yes. | Q2: Are the expenses incurred on the roof and electrical work an allowable deduction? | A2: No.

Relevant facts and circumstances: You and your spouse have a rental property. This property is owned 50-50 by you and your spouse. The property was purchased by you and your spouse and was rented from date of purchase. The property ceased being a rental property a couple of years after purchase. You and your spouse moved into the property and commenced treating it as your main residence. There was a variety of work carried out on the property: • Painting of the entire interior of the house; cost: $XX paid prior to the house becoming your main residence • Re-pointing all ridge, Hip and Gable End Tiles on the roof; cost $XX paid after your house became your main residence • Re-alignment of front guttering; cost: $XX paid after your house became your main residence.

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

Reasons for decision: Summary: Section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997) provides for a deduction for expenses incurred for repairs to premises that are held or used solely for income producing purposes. However, a deduction for capital expenditure is not allowed under this section (subsection 25-10(3) of the ITAA 1997). Taxation Ruling TR 97/23 Income tax: deductions for repairs explains the circumstances in which expenditure incurred by a taxpayer for repairs is an allowable deduction under section 25-10 of the ITAA 1997. Where a tenant moves out of a rental property and repairs are required to be carried out prior to the property either being sold or re-tenanted are an allowable deduction as they have the relevant nexus to the income earning activity. You can claim a deduction for the painting of the entire interior of the property. You cannot claim a deduction for the work carried out after on the property after the relevant date. Example 19 of the rental properties Guide says: Repairs when the property is no longer rented out After the last tenants moved out in September 20XX, the Hitchmans discovered that the stove did not work, kitchen tiles were cracked and the toilet window was broken. They also discovered a hole in a bedroom wall that had been covered with a poster. In October 20XX, the Hitchmans paid for this damage to be repaired so they could sell the property. As the tenants were no longer in the property, the Hitchmans were not using the property to produce rental income. However, they could still claim a deduction for repairs to the property because the repairs related to the period when their tenants were living in the property and the repairs were completed before the end of the income year in which the property ceased to be used to produce income. This example can be distinguished from your circumstances as the Hitchmans repaired the property in preparation for selling it. You moved into the property a couple of years after purchase and commenced living in it as your main residence. You are not entitled to claim a deduction for the repairs on the roof or the electrical work as the property was your main residence when this work was carried out. The work is private in nature and does not have the relevant connection to the income earning activity.