Repair Comment Yes: work to remedy or make good defects

Transcription

Repair Comment Yes: work to remedy or make good defects
Type of Expenditure
Maintenance work - whether
'repair'
Repair
Yes: work to remedy or make good defects,
damage or deterioration does is a repair. Work
done to property not in need of repair, however, is
not repair work and any expenditure for the work
in these circumstances is not deductible under
section 25-10
Comment
Landlords should obtain written confirmation from
an appropriately qualified tradesman, at the time
of the repair, verifying that the work undertaken
was to repair damage and was not simply an
improvement to the property. This would no doubt
assist the taxpayer in verifying his/her claim in the
event of an ATO audit.
Work done solely to meet
No
requirements of regulatory bodies
Expenditure to control health risks No
from dangerous substances
An example of expenditure that is not deductible as
a repair is the cost of removing asbestos and
replacing it with modern insulation material
Repair expenditure of a capital
nature
No: eg replacement of a fence.
Progressive restoration can involve deductible
repairs the nature, scale and dimensions of the
work in proportion to the nature,
*
the period of time over which the work is done
(the shorter the period, the more likely a
reconstruction of the entirety is involved)
Technological advances or
enhancements
Repairs done at the same time as
improvements
No
Yes: providing the repairs of the project can be
effectively separated and considered in isolation
from the rest of the project
Expenditure to remedy defects,
No: Although these are repairs, the ATO's view is
damage or deterioration in
that existed at the time of acquisition of the
existence at the date of acquisition property; and did not arise from the operations of
(initial repairs)
the person who incurs the expenditure.
Expenditure incurred by a
taxpayer on repairs to property
that the taxpayer does not own
Yes: so long as the taxpayer held or used the
property for income producing activities
Expenditure for repairs before
property is held, etc., for income
purposes
No
Replacement or substantial
reconstruction to a property
No
Expenditure incurred to replace
equipment i.e. carpets air
conditioners, blinds etc
No: unless item is less than $300
Repairs to property after tenants
move out
Yes: providing the necessity for the repairs can be
related to a period during which the property was
used for income-producing purposes and the
expenditure is incurred in the year the property
was used for income-producing purposes.
client buys a property, gets excited, goes all out
making repair, thinking to themselves they are
allowed a tax deduction, only to find that they cant
claim initial repairs. One way around this would be
to wait six months to one years before making large
repairs.

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