Private ruling: Repairs to heritage listed rental property
Date of advice: 27 October 2021
Published: January 2022
Ruling period: Period ended 30 June 2XXX
Date scheme commenced: 1 July 2XXX

Ruling: Q1: Can you claim the work done on the heritage listed rental property as a deduction for repairs? | A1: Yes.

Relevant facts and circumstances: You acquired a heritage listed building in 2XXX. The property is used to produce rental income from commercial tenants. You carried out work to repair rotting windows and painted inside of the building to repair peeling paint. You were advised that the rotting windows and peeling paint was caused by rising damp. To fix the rising damp, the exterior cladding was removed from the building exterior and the stonework was re-pointed and repainted. Because the building is heritage listed, the cladding could not be reaffixed because it would again cause damage to the building. You were required to return the stonework to its original state using original materials. The work carried out maintained the building and prevented further deterioration. You did not increase the rent as a result of the work completed on the property.

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