Private ruling: Rental property deductions - repairs
Date of advice: 22 March 2023
Published: 8 May 2023
Ruling period: For the income year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you entitled to claim a deduction for the repairs you undertook at your rental property during the income year to rectify water damage? | A1: Yes. Your expenses meet the requirements in Taxation Ruling TR 97/23 Income tax: deductions for repairs and are deductible. Further information about repairs can be found by searching 'QC 23633' on ato.gov.au.

Relevant facts and circumstances: Your rental property was constructed in approximately MM20YY and has been available for rent to tenants since MMYYYY. In MMYYYY maintenance work was conducted at the property which included resealing of wall tiles, floor tiles, shower screen joints, and re-grouting of tiles due to water leaking in the ceiling below the upstairs bathroom. In MMYYYY, the tenant advised of leaking water in the bathroom, so further repair work was undertaken to re-grout the shower wall tiles. In MMYYYY, the tenant again advised of leaking water in both the ensuite bathroom and the main bathroom which both share the same internal walls. The leaking was worse than before and caused ceiling in the lower level to drip water whenever the showers in both bathrooms were being used. Quotes from plumbers were obtained in early 20XX and it was observed and suggested from several builders that due to the loose tiles and grout, that water leaking through to the living rooms ceiling directly under neath had caused extensive damage to the cement sheet under the shower base, and potentially the timber beams under the floor of both showers. The repairs were started around DDMMYYYY and were completed around DDMMYYYY by X Private Co Pty Ltd. There were no tenants living in the property while the repairs were carried out however the property remained available for rent while the repairs were completed. Ensuite bathroom and main bathroom repairs totalled $X and the Laundry area, internal ceilings and balcony repairs totalled $X. You have paid the repair expenses yourself and have not been reimbursed for any of the costs.

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