Private ruling: Rental property maintenance
Date of advice: 25 September 2017
Published: February 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Are you entitled for your share of a deduction for the work carried out to the roof and guttering of your rental property? | A1: Yes. 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, to the extent that the expenditure is not capital in nature. The replacement of the roof and guttering is not an initial repair, is not the replacement of an entirety, is not an improvement and is in respect of an asset used in the production of assessable income. Therefore the costs incurred in replacing the damaged roof and guttering of your rental property is a 'repair', and the expense incurred is deductible under section 25-10 of the ITAA 1997.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. You are the part owner of a property which has been rented for over ten years. The property is situated near a surf beach. The property is subject to extreme weather conditions of salt air and strong winds which have increased the rate of erosion. The original roof was clad with cement tiles, the coloured glazing deteriorated from the salt and sun exposure and the porous base becomes wet with fog and rain. This promoted fungal rot in the structural timber. You replaced the roof. You also replaced the guttering and internal roof beams.

Relevant legislative provisions: Income Tax Assessment Act 1936 Section 25-10