Private ruling: Rental deductions
Date of advice: 7 November 2023
Published: 6 May 2024
Ruling period: Year ended XX XX 20XX
Date scheme commenced: XX XX 20XX

Ruling: Q1: Is the cost for the removal of trees, which were causing issues with the sewer line of your rental property, deductible under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes. Section 8-1 of the ITAA 1997 allows a deduction for all expenses to the extent which they are incurred in the gaining of assessable income, except where the expenses are capital, private, or domestic in nature. In your case, the removal of the trees is removing the problem of the tree roots causing drain blockages that arose during the period you have been renting out the property. It merely puts you in the same position as you were in before the problem arose and therefore it is considered that the expenditure does not achieve any improvement to the property. Consequently the expenditure is deductible under section 8-1 of the ITAA 1997.

Relevant facts and circumstances: You are the sole owner of a property that you acquired approximately a decade ago. You have used the property to produce rental income since it was acquired. A number of years after the property was first available for rent, a plumbing service cleared a blockage to the sewer line which had been caused by tree roots. In the years since, the sewer line has needed to be cleared of blockages caused by tree roots a couple of more times. In the 20XX income year, on the recommendation of the plumber, you engaged a professional tree removal service to remove the trees that were causing the blockage issues.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 8-1