Private ruling: Deduction - rental property - repair
Date of advice: 2 December 2021
Published: February 2022
Ruling period: Year ended 30 June 20XX.
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the expenses associated with the partially restumping your rental property a repair under section 25-10 on the Income Tax Assessment Act 1997 and deductible in the 20XX income year? | A1: Yes, based on the information provided to the Commissioner the restumping of the stilts on your rental property is a repair and is an allowable deduction under section 25-10 of the Income Tax Assessment Act 1997 in the 20XX income year .

Relevant facts and circumstances: Some time ago you purchased a property as your main residence. At the time of purchase no issues were identified with the Property. Sometime later you were relocated for work. The Property was first made available for rent and soon tenanted out. Approximately two years later the Property became vacant and rental income ceased. At this time a rental inspection was conducted by the real estate agent in which time the restumping defect was first identified. The real estate agents arranged a builder to inspect the Property. The builder advised that the property should not be tenanted given the condition of the stumps noting they could fail at any time with people moving within the home. The Property remained vacant for the works to be completed. Not all stumps needed replacing, the remaining are still originals with no issues. The Builder used galvanised steel with concrete footings, the closest option available with current technologies. No other works were conducted during this period. The cost of the replacing the stumps was $XX,XXX. The invoice for the works was paid in full. There was no insurance, or any other payments received by you for the works. The Property was re-tenanted after the works were completed.

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