Private ruling: Rental deductions - repairs
Published: October 2020
Ruling period: Year ended 30 June 2020
Date scheme commenced: 1 July 2019

Ruling: Q1: Are you entitled to a repairs deduction under section 25-10 of the ITAA 1997 for the following costs incurred on your rental property (as listed on the invoices provided in the ruling application): - Replacement of old pipe with new pipe from shower recess up to outside disconnector gully; - Repair existing shower breech and add spindle extensions due to tiles being tiled over - Installation of new shower taps and rose - Shower reconstruction and fix water damaged wall along with associated labour costs as listed on the supplied invoice. - Associated materials as listed on the supplied invoice - Travelling expenses incurred by the builder as specified on the invoice. | A1: Yes. Your expenses meet the requirements in Taxation Ruling TR 97/23 and are deductible. Further information about repairs can be found by searching 'QC 23635' on ato.gov.au

Relevant facts and circumstances: You purchased a rental property located in Australia (the property) whereby you signed the purchase contract over 10 years ago and the settlement took place a few weeks later. The property has been rented out since a day after the settlement date (the property was already tenanted at the time of the purchase and you continued to rent the property to the existing tenants). You were alerted of some shower problems at the property. The shower water was not flowing away properly due to a blockage. In addition, there was water leaking behind into the shower walls. You arranged for the shower waste and pipes to be changed, as the existing pipes were damaged (matter may have been caught in them and as such contributed to the blockage). You also noticed that the tiles were also cracked in the shower area. As such the shower floor had to be repaired. The shower floor was retiled, and the floor was also concreted, water- proofed and sealed. You also had to retiled over the wall tiles. New shower taps and rose were also installed due to the damages. As a result of these damages / defects in the shower area you incurred the following expenses to bring the shower back to its original condition (as listed on the two invoices supplied in the application): - Replacement of old pipe with new pipe from shower recess up to outside disconnector gully; - Repair existing shower breech and add spindle extensions due to tiles being tiled over - Installation of new shower taps and rose - Shower reconstruction and fix water damaged wall along with associated labour costs as listed on the supplied invoice. - Associated materials as listed on the supplied invoice - Travelling expenses incurred by the builder as specified on the invoice.

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