Private ruling: Expenditure in relation to a commercial rental property
Date of advice: 13 May 2022
Published: August 2022
Ruling period: Income years ended 30 June 2021 and 2022
Date scheme commenced: 1 July 2020

Ruling: Q1: Can you claim deductions for the following expenses in relation to a commercial rental property: • re-concreting the driveway • repairing the driveway section of the storm water piping? | A1: Yes. The expenses are considered repairs and deductible under section 25-10 of the Income Tax Assessment Act 1997 .

Relevant facts and circumstances: You have owned a commercial rental property since 19xx. The commercial property is used to derive rental income. There are two single level buildings on the property; one at the front of the property and the other at the rear of the property. There is a concreted car parking area at the front on each building. The two buildings are connected by a long concrete driveway along the side of the property (side driveway). The concreted areas, including the side driveway, are contiguous and form one concreted section of the entire property. The side driveway had deteriorated with a large section having sunk with concrete completely broken down. The old concrete side driveway was replaced with a new concrete side driveway using a modern concrete equivalent and the works undertaken have simply restored the original function. Upon commencing work on the side driveway, it was identified that the subsurface of the side driveway needed repairing and the storm water piping along the side driveway needed replacing. The old storm water piping along the driveway has merely been repaired using a modern-day material, restoring the original function.

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