Private ruling: Rental property expenses
Published: June 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Can you claim an immediate deduction for your share of the replacement cost of all the blinds in your rental property? | A1: No. | Q2: Can you claim your share of a deduction for the decline in value of the of the replacement cost of all the blinds in your rental property? | A2: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Section 40-25 | Income Tax Assessment Act 1997 Subsection 40-30(1) | Income Tax Assessment Act 1997 Subsection 40-80(2).

Reasons for decision: Detailed Reasoning - Immediate deduction: Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income, except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income. | Detailed Reasoning - Decline in value: Section 40-25 of the ITAA 1997 allows you to deduct from your assessable income an amount equal to the decline in value of a depreciating asset to the extent that it is used to produce assessable income or installed ready for use for that purpose. A depreciating asset is an asset that has a limited effective life and can be expected to decline in value over the time it is used (subsection 40-30(1) of the ITAA 1997). Subsection 40-80(2) of the ITAA 1997 provides that the decline in value of a depreciating asset will be the cost of the asset if the cost of the asset does not exceed $300 and the asset is used predominantly for the production of assessable income. | Detailed Reasoning - Depreciating assets: The vertical blinds are a set of depreciating assets, the cost of which exceeds $300. Therefore, a deduction is allowable for your share of the decline in value of the blinds over their effective life. Taxation Ruling TR 2011/2 states that the effective life for window blinds is 10 years.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You and your spouse own a rental property in which the vertical blinds had deteriorated in more than 10 years. You were advised by the contractor to have all the blinds replaced rather than repair them. | You replaced all the vertical blinds in the property with vertical blinds. | The cost of replacing all the vertical blinds was over $300.