Repairs or Renovation - Intention, Design and Materials

Intention, Design, and Materials

Understanding what separates repair or maintenance work from an improvement requires asking yourself the right questions prior to starting?

Am I fixing or enhancing this?

How will what’s about to be done change what already there?

Those are simply the initial questions.

Being able to take a step back from the situation and assess how you’re going to execute the job, and what materials you’re going to use, is just as crucial.

Because while you might want to carry out maintenance work with the peace of mind that it will be claimable on your tax return, you don’t want to give something a new-angled character, functioning or purpose.

Filling in the cracks in a wall and giving it a fresh coat of paint is very different to rendering the wall for the first time.

Knocking the wall down to create an open design plan will also substantially change the look or character of a property, rather than only remedy the faults it might have, so the costs of such a job will largely not be accepted as a tax claim by the ATO.

Generally, when approaching a repair or any maintenance work, you want to look at what the damaged or deteriorated structure is already made of and use similar – if not the same – materials.

But this doesn’t mean you can’t do both improvements and repairs in the one job and then separate the two categories.

As long as you can provide proof of which part of the job mended something that was damaged and which part of the job enhanced it, you may still be able to secure a tax claim on the repaired portion of the work done.

Builders, painters, electricians, and other professionals can provide an itemised invoice upon request, which will break down each part of the work they have executed, allowing you to separate the costs of the improvements from the costs of the repairs and maintenance work when lodging you claim.

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Jason Gwerder
Monday, 28 June 2021

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