The Australian Taxation
Office stipulates that a rental owner is entitled to claim the costs of any
type of work done to an investment property provided that the expense
ultimately contributes towards its overall maintenance and repair.
With the term ‘repair’, the
ATO is referring to any corrections that are made to repair damages, defects or
instances of wear and tear affecting the property during the time it is rented
out to tenants.
"To repair something means to
fix defects, including renewing parts. It does not include total
reconstruction,” the ATO confirms.
In other words, while the
replacement of a broken shower head or the resealing of a leaking bathtub are
both considered claimable at tax time, transforming a perfectly functioning
bathroom into an art deco meets Moroccan affair most likely wouldn’t receive
the tax office’s seal of approval.
At the other end of the
spectrum, there are the costs that are put towards maintenance of the rental
property, which are also tax-deductible.
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