Private ruling: Deductions - rental property
Date of advice: 4 May 2026
Published: 13 July 2026
Ruling period: Year ended DD/MM/20YY
Date scheme commenced: DD/MM/20YY

Ruling: Q1: Can you claim a deduction for the following expenses you incurred to your rental property under section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. You can claim an immediate deduction in the income year you incurred the repair (or maintenance) expenses for the works on the roof, eaves and guttering, laundry wall, bathroom and family area, laundry cupboard, electrical board and external brickwork. | Q2: Can you claim a deduction for the decline in value of the new blinds as depreciating assets under section 40-25 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: Yes. Section 40-25 of the ITAA 1997 allows a deduction for the decline in value (depreciation) of a depreciating asset you hold, to the extent the asset is used for a taxable purpose. You purchased new blinds and these are regarded as a depreciating asset for Division 40 of the ITAA 1997 purposes. A deduction for its decline in value is an allowable deduction when it is used for income producing purposes. Please note the blinds are a capital item and therefore not deductible as repairs under section 25-10 of the ITAA 1997 | Q3: Can the cost of replacing the smoke alarms, be claimed as capital works under Division 43 of the of the Income Tax Assessment Act 1997 (ITAA 1997)? | A3: Yes. As the cost of these works relate to upgrades and are not repairs, you can claim these costs under Division 43 of the ITAA 1997 as capital works expenditure.

Relevant facts and circumstances: On DD/MM/19YY, you purchased a property located at XXX (the property). You have continuously rented the property since purchase. The property was tenanted immediately prior to the commencement of works in the 20YY income year. The property was temporarily unavailable for rent only while necessary works were undertaken and was made available for rent immediately following completion. The roof was leaking over approximately XX years of rental use. The roof works undertaken included removal of deteriorated tiles, replacement of decayed rafters where required, and installation of Colorbond metal roof sheeting. Damaged eaves and sections of guttering were replaced. No alteration to design or capacity occurred. Sections of the laundry wall had incurred water damage. Only the damaged portions of laundry wall linings were removed and replaced. The works restored the laundry to its former functional condition. In the bathroom and family area there were some broken tiles. The damaged floor tiles were replaced with the same or as similar tiles as the you were able to find. Where tiles on walls needed replacing and had left holes, a low-cost plasterboard was put up to cover. The laundry cupboard was restored to previous functionality as the existing cupboard had sustained water damage. The electrical power board required an upgrade, as each time more than one appliance was powered, it tripped the power board. The power board itself was not replaced but fuses and other internal items were upgraded to the current day equivalent to restore functionality. You replaced the smoke alarms to meet current safety standards. Some external brickwork was damaged, only the damaged bricks were removed and replaced. Mortar was re-pointed where necessary. Some blinds were damaged by mould. These were removed and replaced on a like-for-like basis. You have provided invoices that show the work completed and payment. You have provided photo evidence of damaged areas.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1 | Income Tax Assessment Act 1997 section 25-10 | Income Tax Assessment Act 1997 section 40-25 | Income Tax Assessment Act 1997 Division 43