Private ruling: Rental deductions
Date of advice: 16 March 2026
Published: 29 June 2026
Ruling period: Year ended 30 June 2024 | Year ended 30 June 2025
Date scheme commenced: 1 July 2023

Ruling: Q1: Are you able to claim a deduction for the allowable repairs and maintenance in relation to your rental property even when the property was not being rented for a short period of time? | A1: Yes. Based on the information provided to the Commissioner you can claim the allowable costs associated with the repair and maintenance of your rental property after the tenants broke their lease as an immediate deduction. The cost you incurred to repair your rental property was due to wear and tear from the property being rented. The property was always going to resume being rented after the work had been completed. Section 25-10 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for the cost of repairs to premises used for income producing purposes. However, subsection 25-10(3) of the ITAA 1997 does not allow a deduction for repairs where the expenditure is of a capital nature. You can claim the allowable repairs and maintenance as an immediate deduction for the period your rental property was being repaired and not available for rent. Other relevant comments This ruling did not consider the deductibility of each of the listed expenses you have incurred. If you would like us to consider this, you can submit a private ruling on the deductibility of these expenses.

Relevant facts and circumstances: You own a rental property. You have owned this property for a number of years. The property has always been rented to a third party. Over time the property has sustained wear and tear and some damage due to rain and floods. The rental agency advised you that the property needed to have work carried out on it to make it meet minimum housing standards. You were advised of the requirements when your tenant broke the lease. You commenced getting quotes for the work. All work was completed and the property was available for renting later in the same year. A new tenant signed the lease in the month after the work was completed. Payment for some of the work was made in the income year after the work was done. Payment for some of the work was made shortly after the work was complete.

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