Private ruling: Rental property windows replaced
Published: October 2011
Ruling period: Year ended 30 June 2011
Date scheme commenced: 1 July 2010

Ruling: Q1: Are you entitled to claim a deduction for the cost of the windows that you replaced in your rental property? | A1: 



Reasons for decision: Summary: Section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for expenditure incurred for repairs to premises held or used solely for the purpose of producing assessable income. Taxation Ruling TR 97/23 explains the circumstances under which work carried out will be considered to be a 'repair' and an allowable deduction. Paragraph 15 of TR 97/23 explains that repair is occasional and partial, and involves restoration of the efficiency of function of the property being repaired and may include restoration to its former appearance, form, state or condition. Replacing timber framed windows in a rental property with aluminium framed windows does not alter the character or functionality of the rental property. The aluminium frames may be seen as simply using the modern equivalent of the timber frames. Aluminium framed windows perform substantially the same function as the timber frames. The materials and processes used in the repair do no more than restore the windows to a functional condition. Thus the replacing of the windows is a repair. Accordingly, the expenditure incurred is deductible under section 25-10 of the ITAA 1997.

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 have owned a rental property for some time. | The property is over 50 years old and at least 20 years ago windows with timber frames were installed in one of the rooms. | They had gradually become rotten and difficult to open, and recently the tenants complained that they were so rotten that whenever it rained, water leaked into the room. | You arranged for the windows to be replaced by a builder. | It was not feasible to have new timber framed windows installed, as it would have been difficult and costly to have custom made timber windows installed, as they are no longer used. | You had no choice but to have them replaced with aluminium framed windows, and no other changes were made.